Industry News
From The Cargo Letter


THE CARGO LETTER [324]
Air & Ocean Freight Forwarder - Customs Broker News
11 December 1997


Happy Holidays from our Observation Deck...... Overlooking the officially designated "Cargo City" area and....... Runway 25-Right at Los Angeles International Airport. Our Tom Bradely Int'l Terminal, called the "Ellis Island Of The Air", will take on a dazzling new look as the Board of Airport Commissioners has approved a resolution which will lead to an US$80 million expansion of the world famous facility during the next 3 years. Learn more about our home at the "2015 The Future of LAX' web site: http://www.lax2015.org/links.htm

Contribute your knowledge & information ........ by e-mail to The Cargo Letter. We strive to bring you useful information which is timely & topical.

Our [324] edition is a week late, but we have a Holiday gift to you: Ocean Rates Are Rising !

Michael S. McDaniel, Editor & Publisher

NOTE: The Cargo Letter is designed to be read using a 12 point Geneva font on a standard 6 inch e-mail field. Our TECHNICOLOR edition requires AOL v3.0 or better.

INDEX to The Cargo Letter:

OUR "A" Section: Trade, Financial & Inland News
1. Vancouver Anti-APEC Group Publishes Spoof Edition of The Province Newspaper
   *  Prankster Parody Replaces Special Section
2. The Great Train Wreck of '97
3.  Freight Forwarder Trade Briefs
4. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
5. Freight Forwarder World Air Briefs
OUR "C" Section:  FF World Ocean News
6. FF World Ocean Briefs
7. The Cargo Letter Cargo Damage Dispatches
OUR "D" Section: FF in Cyberspace
8. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
9. The Matter of Importers "Reasonable Care"
   *  Use Of A Customs Consultant
10. Can Oxygen Generators Be Shipped?
11. Don't Forget Carnets For The Olympic Games
   *  What's A Carnet?
12. What The Heck Is An "LD3"?

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


1. Vancouver Anti-APEC Group Publishes Spoof Edition of The Province Newspaper

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

VANCOUVER, BC -- A creative band of anti-APEC (Asia Pacific Economic Conference) protesters apparently obtained a number of bales of The Province, a Vancouver daily newspaper, and replaced the special APEC section with a version of their own. A reported five hundred copies were distributed.

The front page featured the daily weather prediction "Heavy surveillance, chance of snipers," rather than the usual damp prediction for Vancouver at this time of year.

The "lead story" was highlighted by the banner headline "Dictator Dream Team Knighted at APEC!" The subhead read, "Nike boss signs APEC strongmen to high-profile endorsement contract."

The writers referred to Indonesian President Suharto as "The Sultan of Sweat," to Korean President Kim as "Kim Young 'Yosemite' Sam" in addition to slamming Chinese President Jiang Zemin, Fidel Ramos of The Philippines and Ernesto Zedillo of Mexico.

They also called APEC "the NBA of sweatshop leagues" for continuing to ignore repeated charges of inhuman conditions at many Asian shoe factories and announced a new fictional style, the Air Oppressor.

In a sidebar, Jean Chretien, the Canadian Prime Minister, received his share of the protesters' ire when they "quoted" him phonetically in broken French-Canadian English: "We will matchin' dem low wage to wage and strong arm tactic to tactoe in battles for de Stanley Sweatshops Cup."

The protesters also included factual material in their parody section, quoting the Canadian Centre for Policy Alternatives and the Christian Science Monitor. Streetcorners in Vancouver were spray-stenciled with anti-APEC slogans, and dozens of protesters were arrested in various incidents during the conferences.

As the global economy has progressed, global work standards and employee welfare have suffered, the protesters claim. Free-trading organizations such as APEC and NAFTA tend to standardize practices at the lowest common denominator, and have been cited as a cause of additional pollution, global warming and increased hunger and poverty.

Reporters Note: From this reporter's personal observations of working conditions in shoe factories in China and Indonesia, I must agree that the working conditions are substandard, that the actual cost of a pair of shoes is probably a smaller part of the landed cost than the advertising, and that most of the people who work on the assembly lines are young women. I have been to a factory where infants sit in their carriers under sewing machine tables while their young mothers stitch away. Levine.

2. The Great Train Wreck of '97

-- by Michael S. McDaniel for The Cargo Letter

The agony is now said to be over according to the Union Pacific Railroad. Indeed, thousands of rail cars were stalled for days & weeks as the nations largest Ports of Long Beach & Los Angeles felt the grip of a very different holiday season ........ that period when merchandise is supposed to reach the stores for Christmas. For some months now our Great American World Port L.A. has been stuck in the glue of a rail line unable to perform the simple task of moving forty foot containers off the dock and to destination without significant delay. As vessels have diverted to other ports, as merchants have "made do", and as an entire supply chain has re-invented itself ........ the cost to world commerce has been too great to measure.

The U.S. Government imposed both investigations & sanctions, and then went to the point of ordering UP track open to other operators who might better do the job. Even military traffic chiefs told the railroad in October that it would use other sources because of unreliable service on Union Pacific's network, saying that the railroad was late delivering tanks & other shipments & failed to operate a proper security service.

This said, on 4 Dec. 1997, Union Pacific Railroad told Federal Regulators that its system is operating more effectively than at any time since mid-summer. "The serious congestion of recent months is gone," the railroad said in a filing with the Surface Transportation Board (STB). "As of this morning, there is no reason to believe that the remaining pockets of congestion on the system are any more extensive than those one would find on any of the nation's major railroads."

The Union Pacific reports that it has now cleared the backlog at West Coast intermodal facilities & has recovered from a late October blizzard that crippled its key central corridor. The UP wants YOU to know that 1.] its system wide freight car inventory fell to 331,000 cars on November 27, a decline of 26,000 cars since the Service Recovery Plan was implemented October 1; 2.[ that the number of cars spotted at customer facilities has increased by nearly 14% since early October, a sign of dramatically improved operations; 3.] that system velocity rose to its highest level in nearly 3 months, a development that will continue to generate more locomotives across the network; 4.] that intermodal freight in the U.S. increased by over 7% for the first 10 months of this year compared to 1996. More than 7,300,000 trailers &containers moved across US railroads, while carload traffic reached 15,065,882 units.

This said, the Union Pacific asks us all to believe that the service we have all come to expect & rely upon is now restored. We will see.

3. Freight Forwarder Trade Briefs

4. The Cargo Letter Financial Page


OUR "B" Section: FF World Air News


5. Freight Forwarder World Air Briefs


OUR "C" Section: FF World Ocean News


6. Freight Forwarder World Ocean Briefs

7. The Cargo Letter Cargo Damage Dispatches

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.

As to the other disasters of the month, there were so many disasters that we had no space to report groundings, engine failures, barge losses, fire and similar incidents ...........

1.] 1 Nov. M/V NOL Amber (Singaporean-registry 38,541-dwt, 2,308-TEU containership.) ran aground off Goods Island in Queensland, Australia. The ship, fully loaded, was sailing from Singapore to Brisbane, Australia as part of the Australia Asia Express;
2.] 2 Nov. as 1 crewmember was killed and 2 are missing after an explosion aboard the M/T Han Chang No. 5 (South Korean) while anchored at Ulsan, South Korea, waiting to load cargo;
3.] 4 Nov. Three people of 10 that hid in a container loaded with clothing from the Dominican Republic were found dead the after the container was unloaded from M/V Pampero (5,660-dwt containership) at the Port of Palm Beach, Fla. It is believed they entered the tainer where it was loaded before being taken to the port. Investigators found bread, biscuits, crackers & jugs of water. A hole was drilled in to let in air but the hole was blocked by another container;
4.] 4 Nov. a cargo of steel aboard M/V King Ace (Panamanian.) shifted while the ship was southeast of Kagoshima, Japan. After developing a list, the vessel was towed the next day to Naha, Japan;
5.] 10 Nov. M/V Bandura-1 sank after it was in a collision with M/V Kota Bintang (Singaporean-registry) at Chittagong, Bangladesh. Eight of the 9 crew of the sunken vessel were rescued and 1 is missing;
6.] 11 Nov. M/V Chu Hai (Chinese-registry cargo ship) sank after colliding at 2340 with M/V Asian Hibiscus (Panamanian-registry). The ship sank in the Kammon Strait off Kitakyushu, Japan;
7.] 15 Nov. M/V Seiun Maru No. 20 (Japanese) capsized and sank at 0200 after colliding with M/V Sumiho Maru No. 75 off Iwate prefecture, Japan, leaving 1 dead and 3 missing;
8.] 12 Nov. five crew are missing after the sinking of M/V Don Ricardo (Antigua and Barbuda-registry general cargo) in the western Aegean Sea between the Greek islands of Kea &Macronissos. The Don Ricardo collided with M/V Muhieddine VII (Syrian-registry.) in heavy fog;
9.] 19 Nov. M/V Green Lily (Bahamian refrigerated), sailing from Lerwick, Scotland, to Las Palmas in the Canary Islands with frozen fish, had engine problems off the Shetland Islands of Scotland. It was taken in tow by the Gargano (Italian tug) but the tow parted and the Green Lily ran aground. Battered by high winds and heavy seas, the ship broke up 20 Nov. with 1 dead;
10.] 21 Nov. M/V Kate Maersk (Danish-registry containership operated by Maersk Line) lost 26 containers in the Bay of Biscay. Weather conditions included high winds. An investigation has reportedly shown that the containers were improperly stowed and lashings were too slack;
11.] 21 Nov. M/V Nadine (Syrian registry) sank after a collision with M/T Fiandra (Greek) in the Aegean Sea;
12.] 22 Nov. M/T Apanchanit No. 5 y) sank 14 miles off Japan's Nagasaki prefecture;
13.] 24 Nov. M/V An Tai (Belize-registry general cargo ship) sank at Wharf 14 in the North Port of Port Klang, Malaysia, after it began to flood at near the No. 3 cargo hold;
14.] 26 Nov. M/V Kuroshima (Panamanian motor refrigerated ship) has leaked about 100,000 gallons of fuel that came ashore in Summer Bay, Alaska, polluting 2,400 feet of the shoreine and another 1.6 miles of Summer Bay Lake. The ship ran aground in high winds off Dutch Harbor, Alaska. Water depth in the area is at most 7 feet and weather included winds of about 90 knots and seas of 20 feet. Three crew & the chief officer were killed while the 16 other crew members were rescued after a lifeboat was pulled to shore by a line fired to the ship. M/V Kuroshima had arrived to load frozen seafood and had been anchored offshore but its anchor chain snapped and it drifted;
15.] 26 Nov. M/V Hoegh Mistral & M/T Nordfarer (Bahamian) collided in French territorial waters south of the Isle of Wight, suffering heavy damage;
16.] 27 Nov. fire began near the engine room of M/T Sansen Maru (Japanese-registry) 11 miles north- northwest of Masuda, Japan. Sansen Maru is carrying 780,000 gallons of gasoline & light oil;
17.] 30 Nov. a French Dauphin helicopter & a British Coast Guard Sea King helicopter rescued the crew of the MSC Rosa M (1,050-TEU containership operated by Mediterranean Shipping Co.) after they abandoned the ship in the English Channel. Weather included Beaufort Force 5 or 6 conditions. The crew boarded lifeboats after the vessel began listing off Cherbourg, France, after its cargo shifted. The master attempted to return to the ship but abandoned the effort due to the MSC Rosa M's 38-degree starboard list. The ship is to be beached so that pumping operations can continue. The vessel had been denied permission to enter Cherbourg;
18.] 30 Nov. M/V Clipper Skagen (Norwegian tanker) rammed the F/V Peder Wessel (Danish) in the Oresund sound between Denmark & Sweden, killing 2 crewmembe sengers;
19.] 2 Dec. M/T Flanders Gloria (Liberian) collided with M/T Mundogas Orinoco (COSCO.) near Kaohsiung, Taiwan;
20.] 3 Dec. four people were injured, 2 seriously, after a fire inside a cargo tank aboard M/T Mosqueen (Bahamian VLCC) off Dubai, UAE;
21.] 4 Dec. M/V St. Jude Express (Belize dry cargo ship) caught fire and later had an explosion off eastern Cuba. The ship drifted and the 7 crew were rescued by M/V Bremen Senator (46,490-dwt containership);
22.] 7 Dec. M/V Celtic Warrior sunk after a collision with M/V Anagret off Greece. Details are few, but there are no reports of lives lost. HMS Invincible is on scene.

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".................

Here are our suggested world wide web sites of the week for your business, your information and your amusement ...............


OUR "E" Section: The Forwarder/Broker World


9. The Matter of Importers "Reasonable Care"

--by Dave Jordan for The Cargo Letter

On Thursday, December 4, U.S. Customs published in the Federal Register its "final" version of a "Reasonable Care Checklist". Notwithstanding its use of the word "final", the U.S. Customs Service is reserving its privilege to expand the format of the checklist "to suit the changing nature of Int'l trade, without resort to statutory or regulatory amendment." The move is in keeping with Customs consistent position to the effect that it is impossible to devise will comprehensively articulate what would constitute "reasonable care" for every conceivable customs transaction. Customs' position is essentially summarized in their statement that: "Despite the seemingly simple connotation of the term ``reasonable care,'' this explicit responsibility defies easy explanation. The facts and circumstances surrounding every import transaction differ--from the experience of the importer to the nature of the imported articles. Consequently, neither the Customs Service nor the importing community can develop a foolproof "Reasonable Care Checklist'' which would cover every import transaction."

It is only proper that, in an environment of "informed compliance", Customs would reserve the right to attempt to improve upon the guidance that it gives the importing public.

Although, in the words of Customs, the checklist and similar guidelines have "no legal, binding or precedential effect on Customs or the importing community", the publication of this "Final Checklist" is nevertheless of notable significance in view of the emphasis which Customs and the law place upon the importerís duty to exercise "reasonable care", and upon the consequences of an importerís failure to do so. Importers would be ill advised to remain ignorant of material that has been made available by Customs to "educate, inform and provide guidance (to)" the importing public.

The controversy regarding "customs business" and who may legally engage in it has not been put to rest by publication of the "Reasonable Care Checklist". There continues to be a fundamental difference of opinion between Customs & trade groups over the activities of "unlicensed" consultants or other "experts". It is therefore interesting to note a Customsí comment which reads: "In Customs view, the importer who retains the services of an ``expert'' bears some responsibility in ensuring that the party is qualified to render advice on the Customs matter at issue. In Customs view, it is not unreasonable to expect that a part credentials of an expert. Customs believes this responsibility to be particularly important in cases involving selection of unlicensed experts such as consultants. The existence of experienced Customs lawyers and licensed brokers makes fulfillment of this responsibility an easier task--but in Customs view, to limit the selection of an expert to these individuals runs contrary to the language of the congressional reports."

Importers & CHBs should obtain a full copy of the text of the Reasonable Care Checklist. Obtain it from the Federal Register, or contact me and I will be happy to provide you information on how to gain access, free of charge, over the Internet ........... DAFRJORDAN@aol.com [Dave Jordan is a CHB & consultant on customs matters at LAX.]

10. Can Oxygen Generators Be Shipped?

-- by Jim Powell for The Cargo Letter

In the wake of the ValuJet crash, this issue has become very misunderstood by Airforwarders. The surprising answer is yes, you can ship oxygen generators on a cargo aircraft under certain VERY strict conditions, such as U.S. Government approval of the packaging. Sending "spent" generators or those past their expiration date (service date) is prohibited.

This now infamous commodity can be shipped, but you must ensure you have the 1998 edition of IATA Regulations if you are going to ship by an IATA air carrier (which is just about everyone), and that you either have the current CFR-49, or the latest U.S. Federal Register outlining new rules for the Oxygen Generators. As with all shipping of potential HAZMAT commodities, regulations may change on a daily basis, there is no margin for error and training of Airforwarder personnel is a primary goal.

Send your E-mail address to receive a free .PDF copy of the Federal Registers and other necessary info .......... http:/www.logisticstraining.com/hazmat [Jim Powell is a noted HAZMAT consultant with Transportation Development

11. Don't Forget Carnets For The Olympic Games

Whether filming the Games of the XVIII Olympiad or taking samples to show a prospective customer, you'll need a "Carnet" to clear Japanese customs in order to leave Japan with the goods at a later time. ATA Carnets allow for the duty-free, but temporary importation of goods into that country. Japanese customs inspectors are already gearing up for the Olympic Games and have indicated an intention to enforce Customs regulations.

A "Carnet" is an international customs document, "A Merchandise Passport" for duty-free, temporary customs clearance. After visiting Japan, U.S. exporters may go on to use the ATA Carnet for unlimited trips to any (and all) of the other 50 Carnet countries, for example, Korea, Australia, Singapore, Malaysia, as well as Europe & Canada. For full information ...... see your U.S. Customs Broker.

12. What The Heck Is An "LD3"?

For you ocean folks, "ULD" is an air term for "Unit Load Device", the cargo container of the air industry. The LD3 container is a standard workhorse. It is, in fact, a baggage container used for cargo with an internal water volume of 3.4M3. It can be carried by most airlines & most aircraft on the lowerdeck. Maximum gross weight is approx. 1400 kgs.

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