THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
5 November 1997
Good Wednesday Morning from our Observation Deck...... overlooking the
officially designated "Cargo City" area and....... Runway 25-Right at
Los Angeles International Airport. What do we see from our lofty perch? At our
3,500 acre LAX we watch over 2,000 take offs & landings per day bringing
60,000,000 passengers per year to be greeted by 50,000 service personnel. Our
Tom Bradley Int'l Terminal welcomes 14,000,000 foreign visitors a year, MORE
THAN ANY CITY ON EARTH and more people in one day than for the entire U.S. in
the year 1936. It is no wonder that our Tom Bradely Int'l Terminal is called the
"Ellis Island Of The Air" Quite Amazing! L.A. is THE Place !
Today: We have much PIRATE news - In Part 2. Indeed, pirates who attack with
scuba gear ! A violent mutiny at sea, but the mutineers drive BMWs &
Mercedes ?? Read all about new French Transport strike in our Cyberspace
section. Read both our articles about the historic CTNR glut at L.A. ..........
courtesy of the UPRR.
Contribute your knowledge & information ........ by e-mail to The
Cargo Letter. We strive to bring you useful information which is timely
Michael S. McDaniel, Editor & Publisher
INDEX to The Cargo Letter:
OUR "A" Section: Trade, Financial & Inland News
- Business & Cooperation to Continue
-- by Warren S. Levine for The Cargo Letter
SEATTLE (Nov. 2) -- Chinese President Jiang Zemin extended his historic visit
to the United States to attend a banquet at the Beverly Hilton hotel with
political and business leaders, and members of the Los Angeles Chinese
community. After a private meeting with California Governor Pete Wilson, Jiang
met with heads of General Motors and its Hughes Electronics subsidiary, brothers
John and Michael Smith. Some of GM's Buick Regals will be built in China next
year. Jiang is the first Chinese leader to visit the United States since the
1989 Tiananmen Square protests. His mentor and predecessor, Deng Xiaoping,
visited the United States in 1979.
In 1979, then-President Jimmy Carter established full diplomatic relations
with Beijing. When Deng made his momentous visit, the diminutive Chinese leader
put on a cowboy hat and munched on hot dogs at a Texas rodeo, which endeared him
to the American public. Ten years later he ordered tanks and troops to march on
his own countrymen in Tiananmen Square. Deng died early this year, months before
realizing his oft-stated lifelong goal -- to see Hong Kong return to Mainland
During his seven-city visit, Jiang was dogged by protesters at every venue,
some of the greatest crowds amassing in Cambridge, Massachusetts, where Jiang
addressed students at Harvard University, the unofficial seat of anti-Beijing
protests in America. However, in answer to a question posed to him by a Harvard
protest committee, regarding why the Chinese government ordered the tanks into
Tiananmen Square in 1989, the Chinese President may have hinted at revised
Chinese policy on their actions when he said, "It goes without saying that,
naturally, we (the Chinese government) may have shortcomings and even make some
mistakes in our work."
The use of the word "mistakes" was the first time such a hint had
been given that maybe the Chinese government had mishandled the dissenting
student demonstrators. As recently as last Wednesday, Jiang and President
Clinton sparred over Jiang's statement that China had taken "necessary
measures" against the student protesters in 1989.
In New York, former State Department official Winston Lord said that Jiang
had made some "absurd and insulting comments which complicated Clinton's
task in building a domestic consensus to engage with China further."
Republican Governor George Pataki refused to meet with the Chinese President. In
an interview on CNN's Larry King Live, Secretary of State Madeleine Albright
said, "We will never have a completely normal relationship with China until
they sort out their human rights policy ... human rights is so important. I
don't think the American people want us not to engage with China...engagement is
But business with China will go on. Albright summed up the Jiang-Clinton
meetings by saying, "I think it turned out to be a pretty good visit. We
did a lot of business with the Chinese."
On another important sticking point with Beijing, State Department spokesman
James Rubin stated that the United States "made clear that we have a
one-China policy; that we don't support a one-China, one-Taiwan policy. We don't
support a two-China policy. We don't support Taiwan independence, and we don't
support Taiwanese membership in organizations that require you to be a member
Welcome the 1997 theme of "Into the Millennium - Exploring New Frontiers
in Asia Pacific" and will be held from 11 to 13 November 1997 at the
Mandarin Hotel, Singapore. The event will identify the latest developments,
trends &technologies in logistics into the next century, and will also
highlight the importance of logistics in the region's growth, and the
Government's aim to establish Singapore as the regional logistics hub.
Registration is now open for the Congress organized by the Chartered Institute
of Transport (CIT), a professional body for those engaged in transport and
logistics, covering all sectors of the industry. Highlights will include the
findings of a study done by the "American Shipper" on international
shipping & logistics costs; trends in cargo security & asset protection
- a growing concern among logistics operators and the role of Internet &
Electronic Commerce in logistics. Prominent int'l organizations such as Airbus,
Boeing, DHL, Federal Express, Hutchison Delta Ports, IBM, TNT Express & UPS
will share their experiences. IBM is the main sponsor as supported by the
EconomicDevelopment Board of Singapore (EDB), Singapore Trade Development Board
(TDB), and major industry associations such as the Singapore Freight Forwarders
Assn., Singapore Institute of Purchasing & Materials Management, Singapore
Shipping Assn., and Singapore Air Cargo Agents Assn. For information, call the
Congress Secretariat at (65) 278 2538, or e-mail at .
You may obtain information & updates online .........
- Japanese Carriers & FMC Reach Agreement .............. as U.S.
and Japanese officials have reached a basic agreement to avoid Federal
Maritime Commission (FMC) sanctions that would bar vessels of the three
largest Japanese containership operators from entering U.S. ports. The FMC's
decision to block the Japanese vessels came after 3 Japanese carriers failed
to pay $4 million in fines accumulated since 4 Sept. 1997 as countervailing
sanctions in retaliation for licensing regulations & port practices that
allegedly discriminate against non-Japanese carriers and hamper the
operations of US carriers at Japanese ports. The following is a 27 Oct.
joint statement by the U.S. Dept. of Transportation & the U.S. Dept. of
State on Japanese port practice talks ..............:
"We are pleased that the Federal Maritime Commission (FMC) has approved
a settlement with Japanese carriers. The FMC's settlement is consistent with
the goals the Administration and U.S. carriers have been seeking. We look
forward to final signature of the agreement shortly and full implementation.
The agreement will promote competition, lower costs and increase efficiency
in Japan's ports, the costliest in the world for loading and unloading
ships. This will benefit American carriers & consumers as well as
Japanese carriers and consumers. For the first time, U.S. carriers will be
able to obtain licenses to run their own terminal operation in Japan and
will be able to carry out operational changes. We expect that the Government
of Japan will continue to work with us in a spirit of cooperation to ensure
that these reforms are implemented. Open trade begins with open ports. When
ratified and implemented, this agreement will make Japan's ports more open
and will facilitate continued growth in our $180 billion a year trade and
further strengthen the bonds between the two largest economies in the
The role of the Federal Maritime Commission in settling the U.S.-Japan port
dispute appears to have raised prospects for the FMC's survival, which is
currently being debated in Congress, according to the Journ al of Commerce.
- The Comish Goes To Intercargo .............. with a Oct. 15, 1997
announcement that former U.S. Customs Commissioner George J. Weise has been
elected as a director of the corporation. Weise served as U.S. Customs
Commissioner from May 12, 1993 until August 8, 1996. In his previous
position as Staff Dir. of the Trade Subcommittee of the House Ways &
Means Committee, he was directly involved in drafting all major customs
legislation during his 9 year tenure on Capitol Hill. Intercargo is the
leading provider of specialized insurance for Customs brokers, freight
forwarders, logistics providers, intermodal carriers, importers &
exporters, with operations in the U.S., U.K. & Hong Kong.
- Shake Up In The AES Program ............. as U.S. Customs announces
that it will no longer lead the private sector in redesigning the
controversial Automated Export System program. The Trade Resources Group was
established in August 1994 specifically to help implement AES and was
preparing to join Customs in a form of alternate dispute resolution known as
interest-based negotiations to redesign AES so it will gain more acceptance
in the trade community. But now, the Trade Resources Group is being replaced
by the Commercial Operations Advisory Committee (COAC) of the U.S. Dept. of
Treasury. This group also includes exporters, forwarders & carriers,
although it will addresses a much broader range of issues than just AES.
Since AES, which is a voluntary program, has generated very little
participation in the trade community, Customs is eager to resolve the issues
that keep exporters & forwarders from filing their documentation
electronically. Earlier this year, Customs invited the Trade Resources Group
to enter into "interest-based negotiations" on AES, a form of
alternate dispute resolution where each party discusses its interests &
needs, rather than taking firm positions. In the case of AES, the major
issue was how much information exporters must file with Customs before a
shipment moves. These negotiations were supposed to begin by the end of
September, but Customs encountered difficulties in complying with a law
known as the Federal Advisory Committee Act, which lays out strict
guidelines for private sector committees that enter into negotiations with
the government. Accordingly, the Dept. of Treasury decided to shift the
process to COAC, a committee which meets requirements of the Act. The Trade
Resources Group is not pleased that it has suddenly been pushed aside, but
is reserving judgment until it learns which members of COAC will be chosen
to represent the private sector in interest-based negotiations over AES.
"It is essential that all stakeholders in the export process be
represented", says Greg Bakalich, chairman of the Trade Resources Group
and director of project management at Maersk. "I would find it very
silly if in fact they proceeded without that type of representation,"
Bakalich said. For example, although COAC includes an air &truck
carrier, it does not have an ocean carrier as a member. The question of
whether other parties can be brought into the negotiations remains open.
Given these uncertainties, it may be some time before interest-based
- Changes At FIATA ........ as the Int'l Federation of Freight
Forwarders Associations (FIATA) has named Abdelmalek Damahni to succeed
Brian J. Kelleher, who will be retiring. FIATA is also to create a new group
to monitor the structure & organization of the association
- China Continues To Evade U.S. Quota ............. as U.S. officials
suspect China illegally transshipped nearly US$1M of textile goods through
Hong Kong in 1996, according to the Journal of Commerce. According to the
article, if the U.S. lodges transshipment charges against China, it would be
the 4th consecutive year that U.S. Customs has found that China evaded U.S.
quotas by sending textile goods through another country. Still, it appears
that the degree of violation has dropped.
- China WTO Bid Postponed Indefinitely ............ as the next round
of global talks on China's bid to join the World Trade Organization (WTO),
originally scheduled for October, have been put "on hold"
indefinitely since China has not submitted a new market access offer for its
services sector. Circumstances suggest that China might not enter the WTO
- China Trading Goliath Formed .......... as China Nat'l Technology
Import & Export Corp (CNTIC), China Nat'l Instrument Import & Export
Corp and China Nat'l Corp. for Overseas Economic Cooperation will merge this
December to create a huge company with annual trade volume of more than
US$7B, making it China's biggest trading house after giant SINOCHEM.
- China Pushes Balance Of Trade In The Dumper .......... as America's
trade deficit widened to US$10.4B in August, the worst showing in 7 months,
as a flood of imported toys & Christmas decorations pushed the deficit
with China to an all-time high. The U.S. Commerce Department said the
worse-than-expected showing represented a 3.4% increase from a revised July
deficit of $10B. Exports edged up a tiny 0.2%, by the first gain in sales of
American farm products this year, but imports were up 0.6% to a record high
as America's appetite for foreign products continued unabated. While imports
from China were surging to a record US$6.1B, American exports fell to just
US$900M, the lowest level in nearly a year.
- Your Tax Dollars At Work ......... as President Clinton has issued
Presidential Determination No. 97-36 which allows the U.S. Export-Import
Bank to extend a loan to the extent of US$60M to the PRC to finance the
"export of U.S. goods & services" for the construction of
Shanghai Metro Project (Phase 2, Line I). Meanwhile, there is no further
word concerning necessary Washington financial support for completion of the
Los Angeles Metro Rail Project.
- FedEx To Have A Higher Caliber .......... as the big October news
was FedEx plans to acquire Caliber Systems, the parent of RPS, Inc., a
business-to-business non-express package carrier; Viking Freight, Inc., a
supplier of regional freight service in the West; Caliber Logistics, Inc., a
contract logistics provider; Roberts Express, Inc., a critical-shipment
carrier; and Caliber Technology, Inc., a producer of system-wide info
services. FedEx plans to keep Caliber its subsidiaries separate from its own
operations, believing both the express and non-express markets will be
better served as separate and completely focused systems.
- UPS Blasts FedEx - Caliber Deal ........... with the following 9
Oct. 1997 press release .......... "Whether a customer's needs are
routine or express, domestic or international, package or document, UPS has
been and continues to be the most fully capable service alternative
available. In addition, our Worldwide Logistics unit operating in the
growing field of contract logistics is well positioned to help customers
create and manage global supply chain solutions. The FedEx purchase of
Caliber is an attempt to acquire some of the capabilities it lacks compared
to UPS. FedEx is recognizing the wisdom of the course pursued by UPS and
attempting to build in a similar direction. Based on the information
available, however, FedEx seems committed to acquiring new capabilities with
no intention of fully integrating them to offer one seamless service. It
remains to be seen if such an approach will hold an attraction for
customers. Finally, we note this FedEx acquisition eliminates any doubt
about FedEx operating in the same industry as UPS, and thus belies any legal
distinction cited to regulate the two corporations under different labor
laws. We look forward to a re-examination of this issue in Washington."
Thus, UPS has made clear that we will hear more on this subject.
- SFO Blasts FedEx .......... as FedEx has been given an ultimatum by
San Francisco International Airport to either abide by the city's law or
leave. At issue is the `domestic partners law' which came into effect on
June 1. The new law allows employees of companies doing business with the
city to name one beneficiary who will then be allowed to receive benefits
such as health insurance much in the same way as any legal spouse. The
beneficiary may be a spouse, a relative or even a friend. Local businesses
have reacted angrily to the domestic partners law. FedEx & 21 other
companies are in the process of taking the city to court in a law suit being
filed through the Air Transport Assn. FedEx denies the argument is a social
or moral issue, but a question of whether airlines should work under federal
or state law. SFO authorities say they will not be backing down on the
domestic partners issue. Meanwhile, FedEx is in negotiations with SFO
involving US$2.1 million contract for new cargo handling facilities. FedEx
points out that it has a large operations hub next door in Oakland.
- LEP Int'l Closes U.K. HQ ........ as the end of an era comes for
the company. The firm's U.S. owner, International Logistics (IL), of
Chicago, is planning to redeploy some of the employees. Lep, which has
strong trading links with Commonwealth countries, was purchased by IL early
in October. IL purchased Lep North America last year, along with a 33% stake
in the parent company, plus an option to increase its share - an option it
exercised this month by buying the UK company. IL is now a billion dollar
- TNT Hugs Singapore ................ with announcement of intentions
to relocate most of its industry specialists to Singapore and develop the
country as a regional hub. A merger will take place between the offices
handling the Asia/Pacific region. Regional vice president Ken McCall said;
"Strategically, Singapore has been the most ideal location in the
region for TNT EW, both economically as well as socially. We have had our
regional office managing the region here for the last 5 years, and received
OHQ status in 1993. We are committed to developing Singapore as a regional
- FTC Plan May Not Get "Made In USA" .......... as the Made
in USA Coalition reports that support for legislation disapproving the
Federal Trade Commission's (FTC's) plan to lower the standard for the use of
the 'Made in USA' label has exceeded 200 Representatives. Companion
legislation was recently introduced in the Senate, where it has the support
of 6 Senators so far. FTC sources state that they are currently evaluating
the comments received in response to its proposal, and that they hope to
issue a final rule on the matter by the end of the year.
- USDA Goes To The Dogs ........... as the U.S. Dept. of Agriculture
graduated its first class of detector dog teams from the new national
training center in Orlando, Fla. Known as the "Beagle Brigade",
the new human-beagle teams are trained to detect prohibited fruits, plants,
and meats brought in by travelers at Int'l airports. USDA has found that
after one year of experience, beagles sniff out prohibited material
correctly 80% of the time. The success rate rises to about 90% after 2 years
on the job. Teams are scheduled for Chicago, Houston, San Juan, & Miami.
- Customs Hits UL Label Counterfeiters .........as U.S. Customs in
cooperation with Underwriters Laboratories Inc. (UL), the independent,
not-for-profit product safety certification organization, have announced
seizure of approximately 1.8M commonly used electrical products (US$15M
retail) bearing counterfeit UL Marks in one of the most extensive nationwide
anti-counterfeiting operations ever launched. Customs inspectors made
seizures in 22 Customs ports around the country in the past 5 months. The
top ten Customs ports with Los Angeles leading the pack ($2.55 million in
retail value,17% of seizures); followed by Miami ($2.4 million, 16%). UL is
the 1st product certification organization to work with U.S. Customs to
protect its certification mark against unauthorized use. Last year, UL took
additional steps to further combat counterfeiting by requiring holographic
UL Marks for certain products manufactured in China. Get the full story at
Web site ... http://www.ul.com
- Americans Say Rail It ............ as nearly two-thirds of
Americans believe both they & the country would be better off if there
were fewer trucks on the highways and more trains hauling freight instead,
according to a nationwide survey released by Transportation Advocates for
Competition (TRAC ). More than one-in-four Americans (27%) say they have
changed their driving habits because of the number of trucks on their roads.
BUT the California Trucking Association warns that the railroad industry is
currently spending millions of dollars through public interest groups it
funds in hopes of promoting negative news coverage about trucking.
- Just In .... DAHER Golden Eagle and World Trade Transport has
completed the acquisition of Columbia Shipping Group, a privately held
forwarder & CHB with revenues of US$33M for the year ended June 30,
- Airborne Express. UP with earnings of US$46.6M, or $2.05 per share,
for the 3rd quarter ended September 30. This compares to net earnings of
$4.6, or $.22 per share for the same period last year. Total revenues for
the quarter were US$788.6M a 29% increase over 1996.
- APL. DOWN as net income tumbled in the 3rd quarter from US$28.2M to
US$11.4M. Revenues rose slightly from US$646.2M to $653.2M, thanks mainly to
continued rise in the U.S. Stacktrain, Latin America & the Intra-Asian
markets. Net income for the first nine months of 1997 plunged to US$9M
compared to US$52.9M for the same period in 1996.
- Amertranz Worldwide Holding Corp. UP for the fiscal 1st quarter
ended Sept. 30, 1997, with net income of US$230,005, or $0.03 per share,
compared with a net loss of US$1.5M, or $0.26 per share for same period
1996. Operating revenues were US$24,718,652, a 62% increase over 1996.
Stuart Hettleman, president & CEO, said: "In June 1997, we
restructured our operations with the closing of our Amertranz Worldwide Inc.
subsidiary due to substantial losses. We are particularly pleased with the
quick and positive turnaround since our restructuring." The company
operates Caribbean Air Services & Target AirFreight.
- Circle Int'l. UP for the 3rd quarter net income increased 19% to
US$7.1M. Earnings per share also rose 19% to $0.44 per share. Revenue for
the 3rd quarter was $169.6M, up 9% from the same period of 1996. Net income
increased 21% to $18.3M. For Sept. year to date, revenue was $486.8M up 12%
from the same period of 1996, and net revenue increased 7% to $192.4M.
- Delta Air. UP with Delta Air Lines with net income for the quarter
ended September 30, 1997 of US$254M compared to US$238M for the same period
in 1996. Operating income was US$431M for the quarter compared with US$438M
for the September 1996 quarter.
- Expeditors International of Washington, Inc. UP with record net
earnings of US$11.8M for the 3rd. quarter of 1997, an increase of 53%. Net
revenues for the quarter of increased 43% to $80.1M.
- Intercargo Corporation. UP with 3rd quarter net income increased to
$30,032,000, or $3.91 per share, compared to $671,000, or $.09 per share for
the same period in 1996. For the 9 nine months of 1997, net income increased
to US$33.9M, or $4.42 per share, from US$3.5M or US$.46 per share in 1996.
- Singapore Airlines. UP with a reported an after-tax profit of
US$402M for the 6 months ended Sept. 30, an increase of US$4M or 1.0% from
the same period a year ago. Earnings per share also increased 1.0% to 31.3
- USFreightways. UP with record net income for the 13 weeks ended
September 27, 1997 of US$17.5M, a 59% increase over same period 1996. In the
regional trucking group, LTL revenue increased 15.5% and truckload revenue
- ValuJet. DOWN with reported an unaudited net loss for the 3rd
quarter of US$14.6M, or US$.27 per share, compared to a net loss of
US$21.9M, or $.40 per share for 1996.
- Yellow Corporation (Yellow Freight). UP as earnings in the 3rd
quarter more than doubled over the 1996 third quarter results with net
income of US$20.1M, or US$.71 per share, versus 1996 net income of US$8.9M,
or US$.32 per share. Financial analyst's consensus estimates for the 3rd
quarter were US$.66 per share. Operating revenue for the quarter was
US$882.2M, an 11.6% improvement over 1996 revenue of US$790.4M.
OUR "B" Section: FF World Air News
- FedEx Wants A Super Jumbo ............ and has requested Airbus to
develop freight variants of its proposed A-3XX super jumbo jet. Airbus
Industrie will make a decision by the end of next year on whether to launch
the plane, which would cost at least US$8B to develop.
- China Says: Show Me The Money ! .......... as China's only flagship
carrier, Air China, is restructuring into a joint stock company and
preparing to go public. The efforts are supported by the Civil Aviation
Administration of China (CAAC) which has long advocated a restructuring of
the entire Chinese air industry to keep the mainly small regional carriers
operating in China today from collapsing due to lack of adequate funding.
China's two other major carriers, China Eastern Airlines & China
Southern Airlines, are already listed in the HKG & New York stock
- Cathay Pacific Warns Of Tough Times .......... as it issued an open
letter to employees in early Oct. warning them of difficult times at the
airline because of sharp declines in passenger loads. The biggest problem
being a dramatic 67% fall in Japanese business in July.
- U.S. - Japan Open Skies Progress? .............. as the two are
celebrating apparent success after recent negotiations, although they failed
to reach a firm settlement by the initial deadline of September 30. Japan's
request for All Nippon Airways to be added to the 4 incumbent carriers
possessing beyond and other flight rights has now been agreed by the US.
Similarly U.S. carrier Trans World Airlines will be permitted to fly to
Japan while 3 non-incumbent U.S. airlines will be able to increase passenger
flights. A four-year transitional arrangement is expected to stipulate
resumption of talks. As current talks continue, U.S. plans for allowing code
sharing participants from third countries have been postponed. Restricted
alliances between Japan & the U.S. will be allowed in the interim.
Japanese airports including Osaka, Sapporo & Hiroshima will increase
U.S. slots although the possibility of more slots at Narita has not been
settled. Meanwhile, France & the U.S. are seen coming closer to agreeing
on a new bilateral air treaty that would start the phase in of an Open Skies
pact in 1998
- Open Skies Seen To Clip Japanese Wings ......... as the Wall Street
Journal predicts that any between the U.S. and Japan that would more fully
open each country's skies to the other's airlines, no matter how the final
agreement is worked out, will have a negative impact upon Japan Airlines
& All Nippon Airways. They are seen likely to have a tough time
competing with their American rivals because both carriers suffer from
inefficient practices and high costs.
- A Fine Time To Fly ........... as the Federal Aviation Admin. (FAA)
authorized Fine Air Services, Inc., to resume flight operations as of 28
Oct. Fine Air expects to be operating into all of its destinations
throughout Latin America & the Caribbean within the next several weeks.
- Lufthansa Cargo Seeks Freight Partners ........... and is currently
engaged in talks with 15 top multinational freight forwarders as part of
part of a cooperation plan that will take five years to implement. Details
of the discussions are pending. In 1995, its first full year as an
independent company, Lufthansa Cargo made a profit of US$14M, but posted a
loss of $41.2M in 1996. Lufthansa Cargo is aiming to compete with the big
carriers FedEx & U PS, but acknowledges it will have to form many
partnerships around the world with airlines & forwarders.
- Emery Worldwide Goes Latin ......... with last month's opening of
its new Miami "super center. The 120,000-square-foot Latin America
Logistics Center houses Emery's Latin America Area headquarters. Emery has
also opened a wholly owned company in Brazil, Emery Worldwide do Brasil
- BA & AA Continue The March ........... as American Air &
British Air have entered into a crucial phase in their alliance talks with
the European Union regarding conditions required to clear the proposed deal
between the two giants. Addressing the European Parliament, European
Competition Commissioner Karel Van Miert said he hoped for "serious
discussions" to take place in the next few weeks, with a successful
conclusion leading to the European Union agreeing to the alliance between
the two carriers. The European Commission made clear that it expected the
carriers to release 350 weekly slots at congested London Heathrow to rival
airlines in order to win EU approval, but the carriers have so far refused
to release more than 168 slots, as recommended by the United Kingdom's
Office of Fair Trading. The proposed alliance would control 60% of the
traffic between England & the U.S. and would have a monopoly or a
dominant position on 17 transatlantic routes, two figures denied by American
and BA. A major hurdle seems to be that the U.K. wants U.S. authorities to
grant antitrust immunity to the proposed alliance before signing an Open
Skies Agreement with the U.S. while the U.S. Dept. of Transportation has
said it will not grant the immunity unless an Open Skies agreement with the
U.K. can be reached. BA & AA have already began implementing key parts
of their agreement that do not need EU approval, such as code-sharing.
- IATA Warns Of One Crash Per Week ........... as the International
Air Transport Association (IATA) says that the volume of traffic will have
increased so much that a major crash could occur every week in the period 12
years from now unless the air industry takes urgent action to reduce an
already low accident rate. This according to IATA Director General Pierre
Jeanniot. The proportion of accidents to the number of fights &
passengers is already the lowest since Int'l commercial aviation took off in
the 1950s, making air travel by far the safest means of transportation in
the world. During the last decade, aircraft crashes caused less than 100
deaths per year for every million passenger carried, down from 1,800 deaths
in 1962. While the sharp reduction in numbers is attributed to newer
aircraft with sophisticated equipment & better air traffic control, IATA
is now confronted with finding similar safety improving measures to avoid a
perceived rise of deaths attributed to air travel as our industry continues
to grow at a fantastic pace.
- Forwarder In HAZMAT Jail ............. as the president of
Executive Freight Consolidators was arrested at MIA last month and charged
with transporting dangerous materials. The FBI said the president of the MIA
forwarder was charged because he had full knowledge of the contents of the
goods. After paying American Airlines US$800 for "excess baggage",
a company courier boarded a flight with 500 pounds of dangerous pesticides,
covered with black plastic to mask identifying labels. There is no word
concerning I.Q. testing for the arrested company president. The FAA says it
is pledged to spend US$14M on inspection processes and will add 108 new
inspectors to the service by 1998. The current inspection process has been
criticized for being under-staffed and inefficient but the airliners
complain that the only effective way to cut out the accidental carrying of
dangerous goods would be to refuse all cargo and carry only luggage.
- Frontier & Western Pacific Untie Knot ............ with
announcement of their mutual agreement to immediately terminate a previously
announced merger agreement under which Western Pacific would have acquired
Frontier. Subsequent to the announcement, Western Pacific filed a petition
for Chapter 11 Bankruptcy (continued operation) at Denver.
- BA Way Up For Sept. .............. with an increase of 12.1% in
cargo ton kilometers (CTK).
- Northwest Up For 3rd Quarter .......... as cargo revenue per
ton-miles rose 5%, and traffic volume measured in cargo ton-miles grew by
- HKG Sets New Record ........... as 151,340 tons of air cargo were
handled for Sept., surpassing the November 1996 monthly record of 150,070
tons, and is the largest in Hong Kong Air Cargo Terminals Ltd.'s 21-year
history. The company expects air cargo throughput in 1997 to hit 1.7 million
- Cargolux Adds More Jumbos ............ with orders for five
B-747-400F airplanes valued at US$825M to be delivered by Oct. 1988.
Cargolux has optioned two additional planes. Expansion continues.
- N. Korea Won't Shoot ............. as negotiators for North &
South Korea have reached an agreement allowing civilian aircraft in &
out of South Korea to fly through North Korean controlled airspace. The
agreement, reached with the mediation of the Int'l Civil Aviation
Organization (ICAO), will link the two countries FIRs (Flight Information
Region), allowing air traffic controllers from both countries to coordinate
the hand-over of an aircraft from one national airspace to another. Starting
in April 1998 the deal will cut 20 to 47 minutes of flight time between
South Korea, the U.S. &Russia, saving US$14M annually in aviation fuel
while bringing in US$2M to North Korea in overflight charges. The U.S. Dept.
of Transportation has already announced that U.S. aircraft will not be
allowed to fly into N. Korean airspace, being required to fly through Japan
before reaching South Korea.
- Boeing Stock Drops For Too Much Biz ............ and it is no
wonder with all of the orders backed up for delivery. For the 3rd quarter
alone the company delivered 89 aircraft, including 33 737s, 8 747s, 10 757s,
11 767s, 18 777s, 3 MD-80s, 5 MD- 90s & 1 MD-11. Total commercial jet
transport deliveries for the first 9 months of 1997 were 272, consisting of
93 737s, 30 747s, 34 757s, 34 767s, 49 777s, 11 MD-80s, 16 MD-90s and 5
MD-11s. Our industry growth is incredible. Boeing's work force grew to
232,800 as of Sept. 30 from 225,000 five weeks earlier.
- Can SFO Get Bigger? ................ as authorities are considering
further studying a plan for the construction of an additional runway to be
built in San Francisco Bay. SFO is under pressure from the FAA to build an
additional runway to cope with future large aircraft, such as Airbus' A3XX.
The runway could be built on landfill, a bridge or a flotation device. The
airport's two long parallel runways are too close to each other to allow two
such aircraft to land or take-off simultaneously.
- Brunei Will Play - W/O Rules .......... as it's Int'l Airport is
preparing to meet expected growth in the freight market through the
construction of an air cargo hub. The center will be declared a free trade
zone and customs documentation will not be needed for cargo stored in
warehouses. Another benefit is that goods will be exempt from customs duty.
While this may be a great commerce idea for Brunei, we seriously question
what dangerous abuses may result from the lack of ANY controls.
- Varig Cargo Expands ......... and is seeking to lease several
freighters to cope with growing demand for capacity to Brazil and within the
Mercosur region. The fleet expansion will include Boeing 727 freighters for
the Mercosur operations and an extra 60-70 tons capacity in the 1st half of
1998, which means a McDonnell Douglas DC10-30 or a B-747F.
- The Desert Wind Blows .......... as Emirates Sky Cargo broke its
own record for the fastest non-stop flight from Seattle to Dubai in a flight
lasting 13 hours, 34 minutes. The record was set by the 7th Boeing 777 to
join the Emirates fleet on October 1. The total Emirates fleet is now 22
aircraft, including 15 Airbuses and seven 777s. The company operates a 2 x
weekly service between Dubai & Amsterdam in co-operation with KLM Cargo.
- The Death Of EU Duty Free ........... as airport fees & charges
across Europe may rise in 1999 to offset a loss of income for airport
operators due to European Union regulations banning duty free sales on
intra-EU flights starting in July 1999, according to the Airport Council
International (ACI) Europe. Some large E.U. airports such as Amsterdam may
even subject their landing charges to a steep raise as "more than 50%
of total revenue comes from commercial activity not directly related to air
travel" for those airports. Indeed, France's Cognac producers claim
almost 50% of their sales come from duty free shops at airports. Airlines
have so far been rather absent from the debate. Expect our charges to rise.
But be of good cheer because charges at the new Chek Lap Kok Airport will be
25% to 40% less than earlier predicted according to HKG's Airport Authority.
- AirNet Express Is Little Engine That Can ........... with
announcement that it has delivered its 10,000th Premium package. The
"Late Night" box is an example of services offered to meet time
critical shipment needs. AirNet Express now flies to over 100 cities in 40
states and delivers over 15,000 shipments each day. With a fleet of 113
aircraft, including 28 Learjets, AirNet covers 95,000 miles per day. In
addition, the company operates door services, using over 200 company-owned
vehicles & 350 independent agents.
- Berlin Gets A New One .......... as a new int'l airport set to open
its gates in 2007, to be called the Berlin-Brandenburg Int'l Airport (BBI).
- China's Tianjin Airport Is Southern Hub ............. as 1996 saw
an increase 110,000 tons of freight from nations of the former Soviet Union.
Located 120 KMs from Beijing, it's the largest commercial hub for the
Commonwealth of Independent States (CIS).
- NCBFAA to Sponsor Cargo Training at DFW .......... as the National
Customs Brokers & Forwarders Association of America (NCBFAA) will
sponsor the "Cargo Network Services IATA-FIATA Introductory Air Cargo
Training Program" on December 1-5, 1997 at Dallas-Fort Worth Airport.
Contact NCBFAA at (202) 466-0222 for info. NCBFAA members receive a $100
- BART Will Be Able To Fly ............ as the San Francisco Bay Area
Rapid Transit District (BART) in conjunction with the San Francisco
International Airport (SFO) officially marked the start of work on the
long-awaited BART extension to the airport this Monday.
OUR "C" Section: FF World Ocean News
- Harbor Tax Now With "The Supremes" ......... as the U.S.
Supreme Court has now agreed to judge the validity of the federal harbor-use
tax imposed on goods exported by ship from any U.S. port. A federal appeals
court ruled in June that the Harbor Maintenance Tax, enacted by Congress in
1986, is unconstitutional. If the justices agree, the government would face
paying tax refunds from a trust fund that has amassed more than US$1B. The
law imposed a port-use tax of 0.125% of the value of any commercial cargo
loaded or unloaded from commercial vessels at U.S. ports. The tax is
collected by the U.S. Customs Service from importers, exporters or other
shippers. Importers pay the tax along with customs duties. Exporters and
domestic shippers, who pay no duties, have paid the tax on a quarterly
basis. In the case named U.S. Shoe Corp. challenged the tax after making
several payments by filing a refund lawsuit in the U.S. Court of
International Trade. That court ruled the tax violated that portion of the
Constitution banning taxes on exports. The Clinton administration appealed,
contending that the tax amounted to a user fee because all the money
collected could be used only for port and harbor maintenance or expansion.
- Los Angeles - Long Beach Jam Continues ........ due to a record
pre-Christmas cargo season, breakdown of the Union Pacific Railroad system,
and a labor shortage. Vessels are waiting up to 2 days at dock to get
longshore gangs to work them, while others waiting at anchorage for space at
the docks. Containers that are usually sitting on chassis waiting to be
picked up by truckers are jammed into stacks 3 and 4 high to make room for
more incoming cargo. Some terminals are moving containers on chassis off
site. At a hearing before the Surface Transportation Board (STB) on October
27, 1997, UPRR was sharply criticized by customers & government
officials for causing this gridlock that has cost shippers millions of
dollars and spilled over to affect much of the North American economy. On
Friday, Federal regulators issued an emergency order requiring troubled UPRR
to open a section of track to competitor Texas Mexican Railway in a bid to
ease the gridlock. More regulations may follow as Washington steps in. Will
volume drop at L.A.? L.A.'s container traffic (not counting Long Beach) rose
by 13.7% in the first 8 months of 1997. During August '97 alone L.A. handled
1,932,854 TEU, an increase of more than 200,000 TEU on the previous year's
figure. But read on ............ as 16 vessels wait to enter L.A. today, see
a different slant on the problem in our "The Forwarder/Broker
World" section below.
- L.A. To Have World's Largest CTNR Base ............. as the Port of
Los Angeles has announced plans for the world's largest container cargo
terminal ............ and despite a year long COSCO controversy ...... the
Port of Long Beach is wooing China Ocean Shipping Co. as a possible tenant
for the proposed 315-acre terminal to be built on landfill south of Terminal
Island. This will be the world's largest container terminal. The world's
biggest currently is the APL terminal, also in Los Angeles at 232 acres.
Both LBG & LAX ports have launched massive, multibillion dollar
expansions to handle an explosive boom in trade between the United States
and Pacific Rim nations.
- Hanjin Opens Largest Base At LBG ........... as arrival of M/V
Hanjin Berlin last week marked the opening of Hanjin's new170-acre facility,
the largest container terminal in Long Beach and Hanjin's largest in the
world. The port broke ground on the US$277M facility in April 1995. The new
terminal can work two 8,000-foot long container trains at the same time and
has temporary storage space for 18,000 TEUs and 652 electrical outlets for
- Vancouver "Sorry" About L.A. Congestion Woes ......... as
traffic is expected to increase, as U.S. companies divert to the Canadian
port. Container volumes shot up 24% in the 1st half of 1997, to 351,623 TEU,
an increase of 66,188 TEU from the same period in 1996.
- Shipping Deregulation Legislation Less Likely ........... as the
Journal of Commerce reports that it is becoming less likely that the U.S.
Congress will act this year on bills deregulating ocean shipping and
implementing an OECD agreement banning shipbuilding subsidies.
- Shipper's Council Wants Carriers To Leave ............ as European
Shipper's Council issued a call for carriers to withdraw from the
conferences during the European Maritime Law Organization conference held
recently in Brussels. The council has been making attempts to stop
conferences immunity from rules & regulations that govern competition. A
council spokesman called the present regulations an "anachronism of a
carte blanche antitrust immunity." With complaints the shipping lines
cannot respond to the needs of the market effectively under the block
exemption of the conferences, the council urged the carriers to "take a
major self-regulatory step."
- TACA Rates Headed Up .......... as the Trans-Atlantic Conference
Agreement (TACA) has announced increases tariffs by the organization. From
January 1, 1998, rates on eastbound & westbound services will rise by
US$95 per 20-foot container and US$120 per 40-foot container. In 1996 price
increases were only US$40 per TEU and $50 per FEU. However prices could be
lower than indicated and service contracts will still be arranged between
TACA and individual companies. Volume on eastbound & westbound routes is
projected to grow substantially. Keeping pace, the Far East Freight
Conference (FEFC) has decided to increase rates on Asia/North Europe trade
by US$125 per TEU and $175 per FEU eastbound, and not less than $100/200/5
per TEU/FEU/LCL westbound, effective on December 31. No FF objections are
- Korean Lines Will Hold The Line ............ as 7 carriers,
including Hanjin (which will quit the Trans-Atlantic Conference Agreement),
are to operate on minimum freight rates after coming to the conclusion that
continuing price wars would be detrimental. Industry analysts suggest that
falling freight charges would only continue should certain companies not
adopt the minimum rate system, even though some lines are hesitant in the
fears of violating Fair Trade Law. Examples of minimum rates can be seen on
the Pusan-Jakarta route, where a 1 x 40' which cost US$1,200 to ship at the
end of 1996, now costs only US$900. On the Pusan-Taiwan route, the rate for
a 1 x 20' has gone from US$450 to US$300. There are no FF objections to the
- First Lady Takes Control of Panama Canal ........... as Hillary
Rodham Clinton got a chance to control the Panama Canal's Miraflores Locks
last month by twisting a series of chrome-plated levers that unleashed 26
million gallons of water to send the South Korean container ship M/V Cho
Yang Chance on its way to the Pacific Ocean. Operations supervisor Eduardo
Hevia warned that he needed someone for the midnight shift on Christmas.
``I'm your person,'' Mrs. Clinton promised. Unfortunately, humor at the
canal my be short lived. Because the canal's locks operate without pumps, it
requires 52 million gallons of fresh water to send one ship through the
waterway. Deforestation has made the watershed increasingly vulnerable to
sedimentation and reduced the storage capacity of its lakes. Worse, El Nino
is now blamed for the lowest water stocks in Canal history. Diversion of
vessels is a real possibility later this season. Under a treaty negotiated
during the Carter administration, the United States is turning the Panama
Canal and its military bases over to the Panamanians on Dec. 31, 1999.
- Evergreen Isn't Big Enough ............. and thus has announced
plans for a large-scale expansion of its operations. Including its
subsidiary Uniglory, Evergreen has 92 container ships in operation, 24 on
order and plans to order a further 25 vessels. Evergreen's US$3.3B spending
spree will include $2B on 14 new aircraft for its Eva Airways division.
Inquiries into purchasing the Taiwan state-owned China Shipbuilding company
are said to have been made.
- APL's Boomerang Box ........... is a 1 x 40' container decorated
with 70 scenes of Seattle as designed by local school children. It was
loaded aboard M/V President Truman in Seattle last week to educate students
about trade, transportation & the Int'l economy.. In conjunction with
the Port of Seattle & local schools, APL has set-up an Internet site
that will track the travels of the container with info on its location,
contents, the ship its on and ports it has visited. The fist leg was on 25
Oct. to Yokohama. About 400 area students were present for the loading.
Track the Boomerang Box yourself .....
- It Must Have Been A Blue Moon ............. as the Waterfront
Commission of New York Harbor announced the recovery of over US$3.6M of
stolen "Fendi" perfume, imported from Italy. The perfume was
stolen from Sea- Land in Port Elizabeth, New Jersey on October 20. A truck
driver using fraudulent delivery documents removed a 40 foot container laden
with the perfume from the terminal. The bulk of the stolen perfume was
seized from the American Trading Co. warehouse in New Jersey. The Commission
was assisted by the Cargo Theft Unit of the New Jersey State Police, the
Union City, New Jersey Police and the Union County Prosecutor's Office. Good
going guys! We wish such happy endings would follow more of our container
- Bring On The Boxes ........ as market demand for refurbished ocean
containers is expected to rise again next year as continued success is
forecast for U.S. & European imports. Asian ports are anticipated to
handle an estimated 31.5 million boxes, at least 7% of which will be in need
of repair. China & Indonesia are providing competitive prices for
refurbishment by producing new ocean containers at a cost of US$2,300.
Refurbishing usually costs approx. 30-40 per% the cost of a new container.
China &Indonesia are responsible for supplying 500,000 TEUs of the 1.25
million TEUs produced world wide each year.
- Mr Christian ! Return My 'Beamer ! ........... as the crew of M/V
O'Shea Express (Lebanese-registry 300-foot car carrier built in 1970, owned
by Aspen Shipping & Trading B.V.) has mutinied and taken control of the
ship while it was sailing from Bremerhaven, Germany, to Beirut, Lebanon. The
incident occurred 14 Oct. off northwestern France when the Polish master was
forced to surrender control. Some of the Lebanese & Syrian crew said
they had not been paid about US$96,000. However, Aspen Shipping &
Trading said that the revolt occurred when some of the 11 officers &
crew disagreed on certain orders and that the crew has been paid. An offer
of settlement was rejected and the crew has anchored the ship off Plymouth,
England. The owner is now seeking legal action to have the crew removed. M/V
O'Shea Express is reportedly carrying new BMW & Mercedes-Benz high value
autos. In related news, Pitcarin Island has reported a need for additional
BMW & Mercedes autos.
- FMC Revokes FF Licenses ............ as the Federal Maritime
Commission (FMC) has revoked the following ocean freight forwarder licenses
for failure to maintain a valid surety bond :
AAA Forwarding Company; B.W.S. Trade Coordinators, Inc.; Associated
Shipping Agencies; Cadenas Int'l Freight Ltd.; Forwarding, Inc.; Christa
Katten d/b/a World Bridge; Glenn Ellyn Storage Corporation; Frederic
Henjes Jr., Inc.; Int'l Container Transport, Inc.; Freight Express Int'l,
Inc.; Nehls & O'Connell Inc.; I.C.A.T. Logistics, Inc.; O'Keefe &
Associates, Inc.; Intrepid Overseas Shipping Corporation; Oscar Import
& Export Corp.; JF Hillebrand USA West Coast, Inc.; Partec Forwarding
Corp.; La-Rama Shipping Co., Inc.; Pioneer General, Inc.; Maron Shipping
Agency, Inc.; Vialoma Trading Corp. d/b/a Singen Shipping; McCandless,
Violent Pirate Cargo Attacks ............
17 October. Pirates attacked the containership M/V Yi He
(Chinese-registry 25,078-dwt containership operated by COSCO Container Lines)
shortly after it arrived at Manila, the Philippines. The engineer was killed
when he fought back. The ship, with 30 crew, had arrived from Hong Kong before
dawn and anchored off the main harbor when pirates boarded from a motorboat.
21 October. Pirates with scuba gear & submachine guns boarded the
container ship M/V Zim Montevideo (Antigua-registry) on early 21 Oct. at Rio de
Janeiro, Brazil. As many as 15 pirates in small craft used ropes to scale the
hull of the ship as it was docked in Guanabara Bay. The pirates reportedly broke
into one or more containers and stole electronic goods.
27 October. The Royal Thai Navy seized a tanker early that had been
hijacked and arrested the 11 pirates on board. The M/T Oriental City
(Honduran-registry) was boarded by the pirates about 230 miles S.E. of Songkhla,
Thailand, the day before. It was carrying one 260,000 gallons of diesel fuel.
The pirates included 8 Thai citizens and 3 Indonesian citizens and were taken
into custody after a 7 hour search.
The International Maritime Bureaus Piracy Reporting Center indicates that
there were 142 reported acts of piracy from Jan. to Sept. compared to 169 in the
same period last year. Indonesia has the most attacks at 34 followed by the
Philippines at 13. Forty-five crew members have been killed compared with 26
last year while injuries increased from 7 last year to 28 this year. There have
been 11 hijackings and 12 vessels have been fired on, compared to 4 and 4 last
Other sad news of the month included (WHAT A MONTH!) .................. ..
1.] 29 Sept. M/V Madranil Vael Kut (Maltese) hit a newly created embankment
in the Suez Canal while sailing from Ecuador to Jeddah, Saudi Arabia, with
50,000 tons of bananas and is being held at Port Said, Egypt, until the owners
guarantee to pay U.S.$2M in damages. The ship hit the bank after its engine
2.] 6 Oct. M/T Permaisuri (Indonesian) had a fire off Indonesia and has been
3.] 7 Oct. M/T Chang Yun (Yangming) exploded off Kaohsiung, Taiwan. Two crew
members are missing. The explosion blew a 33-foot hole in the starboard hull. A
fire was quickly extinguished but some oil spilled. The tanker was empty;
4.] 8 Oct. M/T Tomislav Grad (Croatian) suffered an explosion at Solin, Croatia.
The first mate was killed and another crew member was injured. The ship had just
begun unloading 1,500 tons of benzene and diesel fuel and the blast shattered
glass 650 feet away. The prow of the ship is seriously damaged;
5.] 12 Oct. M/V Capetan Tzannis (Panamanian-registry motor dry cargo) dragged
anchor and ran aground 65 feet off a beach in Anglet, France. The grounding was
caused by an electrical fault that occurred during a storm. The ship was empty
but had 350 tons of fuel and diesel, 120 tons of which spilled when the ship's
bow was holed. She took on water in No. 2 cargo hold and also has a damaged
6.] 13 Oct. M/V Fidele Express (Belize-registry general cargo ship built in
1962) ran aground on South Beach in Miami Beach just after breaking its anchor.
The vessel grounded directly across from the 21st Street lifeguard stand;
7 .] 14 Oct. M/T Stavanger Prince (Norwegian tanker) drifted 50 miles south of
the Southwest Pass of the Mississippi River. As the ship drifted towards a MARS
oil platform, the 116 crew members shut the oil well and evacuated the structure
using 5 helicopters. A tug, responding to an Urgent Marine Information Broadcast
by the U.S. Coast Guard, took the tanker in tow by the stern and held the ship
on station 5 miles south of the platform until crankshaft repairs were
8.] 19 Oct. Seven vessels were sunk when Sri Lanka Navy vessels attacked boats
of the Liberation Tigers of Tamil Eelam off northeastern Sri Lanka, killing more
than 100 people;
9.] 15 Oct. M/V Zam Ravenna (containership), sailing from Shanghai, China, to
Hong Kong ran aground on rocks. The ship refloated itself but has flooding in
the engine room and No. 5 cargo hold;
10.] 15 Oct. M/V Contship France (operated by Contship Containerlines Ltd.)
exploded & caught fire at Papeete. There is cargo damage. Firefighters
contained the blaze after three hours but 3 were injured. Aerosol cans fueled
11.] 15 Oct. M/T Evoikos (Cypriot-registry) and M/T Oraphin Global
(Thai-registry) collided near the Singapore port limits, about 3 miles south of
Pulau Sebarok. Evoikos was sailing from Fujairah, UAE, to Singapore with 120,000
tons of marine fuel oil. Two cargo tanks ruptured spilling up to 25,000 tons of
oil and the ship anchored three 2 miles from Pulau Sebarok. Damage includes a
gash on the port side 164 feet long and 32 feet wide, from the deck to below the
12.] 19 Oct. M/V Bolivar (motor reefer ship.) suffered an engine room fire 575
miles off western Scotland. The fire was extinguished but the vessel drifted
without power and communications failed shortly after a distress call was sent;
13.] 19 Oct. M/V Black Sea T (St. Vincent & the Grenadines) sank off Hios
Island, Greece, with loss of 1 life;
14.] 21 Oct. M/V Marine Star M (Honduran general cargo) sank after colliding in
dense fog with M/V Dong Bang No. 103 (motor dry cargo ship built in 1996,
operated by Dong Bang Forwarding Co.). Of the Marine Star M's crew, 5 are
15.] 23 Oct. Ten crewmembers of M/V Vanessa (Bahamian/Norwegian interests) were
rescued after the ship sank in the North Atlantic, 419 miles east of St. John's,
Newfoundland. Four crew have been killed and 1 is missing. The Vanessa sank
after its cargo of ammonium nitrate and calcium nitrate shifted weather of
Beaufort Force 8 or 9, roughly 20-foot seas & winds of about 40 knots. She
sent a distress call at 1300 after developing a starboard list;
16.] 23 Oct. M/V Zakaria (Syrian general cargo) sunk 20 miles off Tantous while
sailing from Greece to Lebanon. Five crew are missing;
17.] 23 Oct. M/V Gijon (Russian "fish factory" built in 1993) exploded
& caught fire in Victoria, British Columbia while under repair. The dry dock
was partly flooded to cool the vessel's fuel tanks but at last report the fire
had not been extinguished. Five blocks in Victoria were evacuated. As of 26
Oct., firefighters were taking 20-minute shifts to fight the fire;
18.] 25 Oct. M/V Me Linh (Vietnamese-registry containership) collided with the
F/V SMF 948 (Singaporean-registry wooden fishing vessel) 5.3 miles northeast of
Horsburgh Lighthouse, Singapore. One of 3 Indonesian citizens on the fishing
vessel is missing while 2 were rescued. M/V Me Linh, sailing for Ho Chi Minh
City, Vietnam, was not damaged;
19.] 26 Oct. seven S. Korean fishermen are missing after M/V General Kezim Orbay
(Turkish cargo ship) collided with a South Korean fishing vessel off
southwestern South Korea. The vessel partially sank. The freighter fled and was
stopped 40 miles away;
20.] 27 Oct. M/T Atlantic Blue (Panamanian-registry) had an explosion in its No.
2 cargo tank as the ship was being worked on by Hyundai at Ulsan, South Korea.
Nine people were killed and 8 injured, one critically. An ensuing fire was
extinguished two hours later. A preliminary investigation suggests that a
welding torch ignited oil sludge in piping;
21.] 28 Oct. M/T Serifos ran aground on sand off Cape Pappas, Greece, near
Patras, with 1,800 tons of gasoline. The ship's bow was damaged and some
gasoline spilled. In addition, high winds since the grounding have caused the
ship to be holed below the waterline. On 30 Oct., 3 were arrested, including the
Master, for causing a shipwreck &polluting through negligence;
22.] 30 Oct. M/V Qingdao Express (operated by Hyundai Merchant Marine) was at
anchor off Pusan, South Korea, when it was hit by M/V Hua Kun (Chinese). The
Qingdao Express took on a 75 degree list and may have lost containers;
23.] 30 Oct. M/V Torm Eastern (bulk carrier) and M/V Chul Jin collided recently
off Mokpo, South Korea with severe damage to both.
NOTE: The historic dangers of carriage by sea continue to be quite real.
Shippers must be encouraged to purchase high quality marine cargo insurance from
their freight forwarder or customs broker.
OUR "D" Section: FF in Cyberspace
Here are our suggested world wide web sites of the week for your business,
your information and your amusement ...............
- U.S. Customs Web-Site Newspaper .......... as the leading Int'l
trade agency goes to the web with a very colorful & useful publication
which strives to serve its public with everything from timely press
releases, to Federal Register notices, to quota info, to new
classifications, to currency exchange rates, to reports of their arrests,
seizures & adventures in defense of the Borders of the United States of
America. Indeed, few understand the extent to which USCS provides added
protection to the entire world. BRAVO !
- Full Coverage Of The Transportation Strike In France
- Int'l Trade Administration (ITA) .......... trade mission calendar
based on Commerce Secretary Daley's trade mission policy that went into
effect on March 3, 1997.
- U.S. Bureau of Transportation Statistics (BTS) .............
reports &cargo stats from 1982 to present. Included, 'Transportation
Statistics Annual Report 1997".
- The Official Home Page for The Air Cargo Newsgroup ........ has
been moved. Use this important resource.
- Caliber Systems Inc.
- Updates Shipping Weather Maps, Forecasts & Info
- Listening To Air Traffic Control ........... at DFW.
........ but why go to the web when YOU can hear all the drama and action of
our LAX Control Tower LIVE ! by simply dialing Countryman & McDaniel at
(310) 342-6500 and requesting to be put "on hold". Listen from 9am
to 6pm daily ....... from anywhere in the world! After all, anyone can
settle for mere "music on hold"!
- Watching Your Cargo Move In L.A. ............... as this site shows
the current state of all Los Angeles freeways.
- Consumer Product Safety Commission (CPSC) .......... color
photographs of recalled products.
- The National Transportation Exchange ............. owned in part by
AT&T, offers service to qualified shippers & carriers. A shipper
tenders a load to the NTE via the Net. The Exchange then finds the closest
NTE carrier member with available space and advises the shipper of its
choice via e-mail. The load is picked up and delivered, with progress
reports sent back to the shipper. Meanwhile, the NTE keeps performance data
on the carrier. NTE acts as a middleman in the billing process.
- Portnet Italia ......... has a new service proving details of all
ships calling Livorno port since 1990, including last arrival date, time and
last port of call; last departure date, time & destination.
- Tradex Online ......... of Transamerica Leasing was named
"Site of the Month" by leading industry trade publication --
Containerisation International. Tradex Online is part of Transamerica
Leasing's initiatives to promote electronic commerce within the intermodal
transportation industry and enhance its customer service options.
- URL-minder ............Your Own Personal Web Robot! It will let you
know when a web site you are monitoring has changed. Watch the competition!
- SS United States
- Tall Ships Books ........... nautical books from the age of sail,
up to present day. A link to your nautical related site will be added for
- United States Navy in the Pacific War 1941 - 1945
- Submarine Operators Mailing List ......... everything about subs,
past &present. subops via
- Dictionary of American Naval Fighting Ships
- Santa Will Be Shipping ........ as letters from Santa will have a
genuine North Pole postmark (from the village of North Pole, Alaska) this
year. Children can receive personal letters from Santa, Mrs. Claus, Rudolph
the Reindeer or the Elves in the Workshop.
OUR "E" Section: The Forwarder/Broker World
-- by Marcus Wiedemeier, DAMCO Maritime
There are times when the broker or forwarder is more prone to be sued when
they insure the shipment, but deal with a client who fails to read his coverage
and thereby appreciate of the limits of marine cargo coverage.
One classic example happened to me a few years ago. One of my export people
was handling perishables and came to me with over $400,000 in claims for damaged
goods - all the Ryan recorders showed temperature at start up was warm and
eventually got to proper temperature. I advised the client he was not covered
for such a loss under marine cargo insurance and would have to claim against the
ocean carrier or the farmers who loaded the containers. He blew a cork. He
threatened to sue and then really got upset when the ocean carrier told him to
take a hike. It seems that he bought his produce loaded in container in the
field and the farmers did not turn on the Gen. sets until after the container
was loaded - temperature inside container was recorded around 85 degrees. The
produce was wilted before the Gen. set pulled the temp down.
I had to call in the insurance company representative and alert the E &O
carrier. Through the professional efforts of both there was no suit. The point,
however, is that proper education for the client would likely have compelled him
to take extra precautions instead of relying on insurance coverage which offered
no protection for this rather common produce scenario. Encourage your customers
to read and understand the nature, purpose and limits of their cargo coverages.
For related information see our story:
"NVOCC Wins Important Federal Case"
***The FF And The CY*** in The Cargo Letter  of
17 March 1997 at our web site.
-- by Cameron Roberts, Esq. for The Cargo Letter
These days the lines in Los Angeles extend to the Pacific Ocean. Off the
coast of Los Angeles & Long Beach tonight, 16 vessels wait to off load their
cargo, wait for the LA harbor Pilot strike to end, and wait for the Union
Pacific to untie the Gordian knot that has become the Southern Pacific
&Union Pacific Railroads.
The delay stems from UP's 3.9B purchase of SP last year. UP is having
difficulty integrating SP's computer, dispatching & equipment management
system in time to accommodate this years Christmas. Despite a combined workforce
of 52,000, UP is short of systems, crews & equipment needed to handle
current capacity at the Ports of Los Angeles & Long Beach, the busiest ports
in all the Americas.
The congestion first appeared in Houston and has spread across much of the UP
network. The congestion has begun to snowball and points out the weak link in
the logistics chain caused by consolidation and downsizing of personnel before
UP was ready for the transition?
Several large shippers have already put in claims for losses caused by poor
service. Entergy Corp., Air Liquide America & Chevron, have already
announced plans to seek compensation from UP for delay. Moreover, the Surface
Transportation Board (STB) is carefully monitoring the situation to insure that
the UP/SP merger is in compliance with conditions. The merger was subject to STB
approval and service criteria were a key issue in the negotiation. To combat
criticism and to stay off potential claims for delay, UP implemented a broad
based plan of action to improve service & speed up transit times. UP had
considered chartering an APL vessel to re position 1,400 TEU's to Savanna,
Georgia, however, has opted for diverting shipments to competing railroads and
by hiring former SP executives to help resolve service problems. Optimistic
forecasts predict that it will be Spring 1998, before service levels return to
their pre-merger standard.
Further Woes For The Great Lady ........ as the famed S.S. United
States currently is taking up space at pier 82 in Philadelphia. Owners keep
touting ideas of either rehabbing her as a cruise ship or casino. The latest
effort is to make some sort of unspecified deal with Kvearner Shipbuilding Co.
as part of its bid to take over part of the Philadelphia Naval Shipyard. The
City of Philadelphia had turned down requests to dock the ship at the idled navy
yard because there was no guarantee the owners would have the cash to move it.
Purchased at a 1992 auction by a Turkish combine for rehab as an Agean cruise
ship, S.S. United States was towed to a Russian shipyard in Istanbul, where it
was gutted (even to captain's bathtub) of asbestos, lifeboats & davits.
Proposed rehab proved too costly and in 1996 ship was towed by a Russian tug
back to U.S. Arrangements for berthing in Boston fell apart when the vessel
structure was found too high for Logan Int'l Airport flight paths and her hull
too deep for inexpensive dockage. The ship was next towed to Philadelphia. Hope
for saving this treasure continues, but on Oct 27, The Journal of Commerce
reported that there is a notice that the once proud S.S. United States has been
arrested and will be auctioned by the United States Marshall on 6 November 1997.
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The saga continues. Read more at ..........