The Cargo Letter
THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
23 April 1998
Good Thursday Morning from our Observation Deck...... overlooking the
officially designated "Cargo City" area and....... Runway 25-Right at
Los Angeles International Airport. It's official! LAX has been voted ``Best
Cargo Airport in North America'' for a 5th straight year and is #2 in the world
for cargo throughput. L.A.'s THE Place!
Contribute your knowledge, stories & company 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.cargolaw.com
Featured on the front page of Air Commerce - The Journal of Commerce for 23
March 1998, regarding our TRANS-CAMS feature, the only 24 hour LIVE! cameras
dedicated to the Int'l transportation industry.
Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel,
forwarder/broker attorneys at LAX.
INDEX to The Cargo Letter:
OUR Top Story
1. Interpool Opens New "The Cargo Letter" Services
* A Forwarder-Broker 1st
OUR "A" Section: Trade, Financial & Inland News
2. Trade Ins. & Roanoke Ins. Unite
* Becomes U.S's Largest
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. U.S. Supreme Court Strikes Down Harbor Tax
* Details Of Customs Refund
7. FIATA Expresses Reform Concern
8. FF World Ocean Briefs
9. The Cargo Letter Cargo Damage Dispatches
OUR "D" Section: FF in Cyberspace
10. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
11. California's New Harbor/Airport Pick Up & Delivery Regs
12. U.S. Customs Processing Prototype Announced
On 7 April, Interpool Inc., a world leader in ocean container leasing &
distribution services, made history by establishing the first "Message
Center/Chat Board" where Int'l air & ocean freight forwarders
&customs brokers can post comments, complaints & questions to the
industry. Users will now be able to exchange information on current topics of
concern & interest 24 hours a day at The Cargo Letter web site. Said
Interpool webmaster Ed Graham, "For many years the industry has needed a
place of it's own to exchange ideas. Carriers have had such resources for some
time, but not the Forwarder-Broker". Forwarders & brokers now have a
true home, a real soap box for venting complaints & ideas and to obtain
Interpool Inc., is also proud to announce a long needed "Search
Engine" for The Cargo Letter where visitors, researchers & students
can explore the oldest Internet news achieve of our industry. Searching by key
word, classic stories, data & events can instantly be recalled and printed
out for use. Just as The Cargo Letter was the 1st industry publication on the
Internet, all the events & news captured in this exciting period of our
history are now available for review. Indeed, comments placed on the
"Message Center/Chat Board" may help make Internet history for our
industry in the years to come! Let your thoughts be known ..... NOW.
Get these new Forwarder-Broker services: .......... "Message Center/Chat
Board" & "Search Engine" Now available through the service
gateway index .......... http://www.cargolaw.com
This web site was the subject of a 23 March front page Air Commerce - Journal
of Commerce article regarding our TRANS-CAMS, the worlds only gathering of LIVE!
24 Hour cameras trained on transport related activities around the world. During
the next two weeks we will introduce the world's 1st "Carrier-Cam" on
the entire world wide web as Coastal Air Transport opens its cam which will be
used to show forwarders & shippers exactly when a flight has arrived. Who
will be next? The public relations possibilities are endless, as was made clear
by The Journal of Commerce. Please visit TRANS-CAMS to see how your company can
set up a live camera for less than US$200.00! Customers will flock to your site.
Please send your comments to The Cargo Letter. http://www.cargolaw.com
On 30 March, Intercargo Corporation (NASDAQ:ICAR) and Roanoke Brokerage
Services announced the formation of the largest U.S. insurance brokerage
operation specializing in customs bonds & marine cargo insurance for the
int'l trade community. As part of the alliance, Intercargo will merge the U.S.
operations of its Trade Insurance Services (TIS) unit with Roanoke. The combined
organization will be known as Roanoke Trade Services. Combined operations are
planned to commence on May 1, 1998. Intercargo Insurance Company will continue
operations as usual as the leading provider of marine insurance,
Forwarder-Broker liability insurance and customs bonds to the industry.
"We are pleased and excited about this arrangement," said
Intercargo Corporation CEO Stan Galanski. "This is a win-win-win situation.
Intercargo will concentrate on its core strength as the premier specialty
insurer for international trade & transportation companies, while Roanoke
Trade Services will focus on the delivery of insurance products & services
to our mutual retail clients and prospects. Our will customers benefit from the
top-notch insurance brokerage operation, backed by Intercargo's products &
Under terms of the agreement Intercargo Corporation will hold convertible
preferred stock & notes of the new organization totaling the commission
revenue of its contributed unit. In addition, Intercargo Insurance will become a
preferred provider for Roanoke Trade Services.
The new company will have over 180 sales & customer service personnel
located in 10 key port cities in the U.S. "We believe the real winners in
our alliance with Intercargo will be the customers, who will benefit from better
service and a wider range of products," said Roanoke CEO Bill Sterrett.
"Integrating the two brokerage operations will result in a very technically
skilled staff who is truly focused on the customer's needs. We look forward to
the additional resources and excellent client base TIS brings to our network.
Also, adding Intercargo to the list of more than 50 domestic & Int'l
insurance companies with whom we maintain close relationships is a real
bonus." Both Intercargo & Roanoke have their headquarters in
Schaumburg, Illinois, a suburb of Chicago.
- Air Cargo Internet Symposium 2 A Success ............ as
the buzz in transportation this week is about the Air Cargo Internet
Symposium 2, co- sponsored by the Journal of Commerce & Oakland Int'l
Airport. The conference, also organized by Michal Douglas, moderator of the
Usenet misc.transport.air- industry.cargo group, featured speakers from UPS,
United Airlines, DHL, forwarder-broker attorneys Countryman & McDaniel
& others. Said speaker Michael S. McDaniel, "There can be no doubt
that this important Conference defines the future path of our
industry." If you missed the show at Oakland, you can now hear speeches
via RealAudio, download text versions of the speeches as well as the
PowerPoint presentations from a special web site. This is must for all
forwarder-brokers who are interested in the future of our industry as it
will continue to take shape in EDI and the Internet http://www.coastalair.com/acis2-98/main.htm
- New Officers For The National .......... as the San
Antonio convention of National Customs Brokers and Forwarders Association of
America (NCBFAA) elected the following 4 new officers to two year terms:
President: Peter Powell, Sr., C.H. Powell Company Vice President: George
Menendez, Sack & Menendez, Inc. Secretary: Federico Zuniga, F. Zuniga,
Inc. Treasurer: David Katzman, Advance Brokers, Ltd.
- Re-Modernizing the Earlier Mod Act .......... as U.S.
Customs says it will complete regulations implementing the Customs
Modernization Act of '98 by Oct. "We're under a lot of pressure to get
the Mod Act done," said Samuel H. Banks, acting commissioner of
Customs. "We're going to get those regulations delivered and out on the
street." U.S. Customs says it also plans to finish its Y2K (Year 2000)
computer reprogramming by summer. Other Mod Act of '98 initiatives, such as
the Automated Commercial Environment, are taking longer because of limited
funds, Banks said. "We got US$8M for systems enhancements, and our base
requirement was US$15M," Banks said. "We'll do the most we can for
the system with what we can afford."
- U.S. Customs Sharpens Your Tools Of The Trade ..........
as a new quarterly publication is announced, called 'Tools for the Trade,'
which contains brief one page articles on a variety of trade & broker
related topics. Customs has also added a 'Reconciliation Information Page.' http://www.customs.ustreas.gov
- Circle Signs Huge S. African & Irish Ventures
........ as 3 of the few truly large commercial firms which drive South
Africa's economy have joined forces with forwarding giant Circle
International (NASDAQ:CRCL) to launch a new freight management business. The
largest direct shareholder is Rennies Group, with over 10,000 employees,
which is controlled by SAFREN (Safmarine &Rennies Holdings, Ltd.) and
AMIC (Anglo American Industrial Corporation, Ltd.), whose combined assets
total almost US$7B. Through its forwarding &customs brokerage
businesses, which trade as Renfreight, Rennies is the leading global
logistics player in South Africa, but by combining these businesses with
Circle SA, they emerge in a league of their own. Circle's existing partner
in South Africa is Barlow, Ltd., with assets of over US$2.5B. Meanwhile in
Ireland, Circle has acquired the air & ocean freight business of its
previous Irish agent, Reindear Freight Int'l, while at the same time
entering into an exclusive partnership with Irish Express Cargo (IEC), the
largest Int'l forwarder in Ireland, with over one million sq. ft. of
warehousing space throughout the country, as well as the UK & Holland.
New facilities are currently under construction in Dublin, Limerick &
Glasgow that will complement Circle's existing global network. NOTE: Last
month the Rotary Club of Cincinnati had collected more than 20 pallets of
used medical supplies badly needed at the Children's Medical Clinic in San
Cristobal in the Dominican Republic, but had no way to transport the goods
from the U.S.. Circle Int'l provided inland carriage & Sea-Land got the
relief aid to destination by sea ........ for free. Take a bow, guys. The
web site is .... http://www.circleintl.com
- Fritz Expands In Holland, Italy, the Czech Republic & Russia
......... as Fritz Companies opens a new 119,000 square feet
state-of-the-art European Warehouse & Distribution Center in Tilburg,
Holland, as well as new branch offices in Rome, Italy, & St. Petersburg,
Russia. There is also a new city warehouse in Prague, Czech Republic.
"Clients benefit because Tilburg is conveniently located between the
airports of Brussels & Amsterdam & two of the largest ocean ports on
the continent, Rotterdam & Antwerp, with direct access to the
intersection of the main European highways," said Henk Croese, Managing
Dir. of Fritz Companies Nederland BV. "Our clients also benefit by
having full visibility to their materials in the supply chain through
Fritz's FLEX Warehouse Management System installed at Tilburg."
- Danzas Gets Sermat SA .........as it acquires the French
company that specializes in project shipments for construction, mining, oil
& energy businesses. The company will be managed as an autonomous unit.
- France Opposed To U.S.-EU Deal ......... with strong
opposition to the so-called New Transatlantic Marketplace agreement with the
U.S. The proposal is intended to eliminate technical barriers to trade
between the EU & U.S., as well as reduce tariffs and relax restrictions
in services, investment &intellectual property. France argues that the
proposal's provision for a bilateral dispute resolution process to be
established between the EU and U.S. would undermine the WTO dispute
resolution process. France also reiterated its position that current EU-U.S.
trade disputes, such as the disagreements over hormone treated beef imports
and the controversial U.S. Helms-Burton legislation, should be settled
before expanding trade between the two sides. While other EU members
questioned the proposal's WTO-compatibility, only France opposed the
- New U.S. - Taiwan Carnet .......... as the U.S. Customs
Service & the American Institute in Taiwan (AIT) signed an operational
agreement regarding the AIT and the Taipei Economic and Cultural
Representative Office (TECRO) carnet agreement. The agreement formalized
U.S. Customs acceptance of the AIT-TECRO carnet. The AIT, the organization
representing U.S. interests in Taiwan and the TECRO, the organization
representing Taiwan interests in the U.S., recently concluded a bilateral
carnet agreement. Carnets issued under the AIT- TECRO carnet agreement are
similar to those carnets issued under the ATA Convention and will facilitate
temporary admission of commercial samples &professional equipment
through customs formalities in the U.S. & in Taiwan. U.S. exporters will
now be able to move their goods into Taiwan with an AIT- TECRO carnet, in
addition to being able to move goods into Canada, and over 50 countries in
Europe, Asia & Africa with the ATA carnet. The U.S. Council for Int'l
Business (USCIB) will issue carnets for goods intended to be exported from
the U.S. and reimported into the U.S. In Taiwan, the China External Trade
Development Council will issue carnets for goods from Taiwan which may be
temporarily imported into the U.S. and eventually reexported. These
organizations also guarantee the payment of duties to their respective
customs authorities should the goods imported under the carnet not be
reexported within the time period allowed. An AIT-TECRO carnet is valid for
a period of 1 year from the date of issuance.
- UPRR Woes Ease At Laredo ........ as UPRR says a backlog
of rail cars, more than 5,500 as of 24 March, waiting to cross into Mexico
from the U.S. is beginning to ease. In an effort to relieve the congestion,
UP announced a partial embargo of southbound traffic through the Laredo
border crossing, excluding auto & intermodal traffic. Union Pacific
originally said the embargo would probably last as much as a month, but now
says it may be lifted sooner than expected. On 14 April UPRR introduced
permitting to control traffic volumes. Customers may obtain permit numbers
through Union Pacific's Customer Service Center to move embargoed traffic.
The permitting system allows UPRR to meter southbound traffic to prevent any
surge of business that could again block the Laredo crossing. In related
news, Union Pacific Railroad's CEO has conceded that the nation's largest
rail carrier should have paid more attention to safety last year as it
scrambled to absorb Southern Pacific's lines. The NTSB is examining a rash
of 15 Union Pacific accidents that claimed 13 lives and destroyed a vast
amount of cargo last year. Despite the admission, attorneys for UPRR remain
VERY slow in taking action to resolve cargo claims for freight destroyed by
- Xerox Goes To The Tower .......... as Xerox Corporation
has selected Tower Group Int'l as its national customs broker. Tower Group
will handle Xerox's U.S. import transactions in more than 35 ports of entry.
A key aspect of the new contract calls for Tower Group to utilize its
document imaging & retention system to help Xerox image all of its
import documents and retain them. "Imaging offers a number of benefits
for an importer like Xerox," says Sr. V.P. Arthur Litman. "The
system will offer immediate access to all documents for all ports of entry
and also help Xerox meet U.S. Customs' record keeping requirements."
Tower is opening a Rochester, N.Y., office to serve as the hub for agreement
with Xerox. Tower, a wholly owned subsidiary of The McGraw-Hill Companies.
- CNA Buys Marine Underwriter ........ as Chicago-based CNA
has agreed to acquire Maritime Insurance Co. Ltd., a U.K.-based marine
insurer, from Norwich Union. CNA said that in the U.K., Maritime will
operate as an independent unit within CNA's new U.K. holding company. In
Canada, CNA will integrate Maritime with CNA's MOAC business unit.
- Trade Secrets & Customer Lists Protected ............
as a court at Benton County, AK, has granted J.B. Hunt Transport Services an
injunction against Cardinal Freight Carriers to prevent its use of certain
trade secrets & practices. J.B. Hunt sought to enforce confidentiality
agreements it had with 19 former employees who left to join Cardinal last
year. Additionally, the defendants are prohibited from doing business with
customers AutoZone, Georgia-Pacific, Home Depot, and Office Depot until 15
- J.B. Hunt Logistics Serves JAVA ....... as it brews up a
steaming suite of Java-based software that it hopes will change the way it
connects with most of its contracted motor carriers. With the help of IBM
Corp., J.B. Hunt Logistics created the "Internet Carrier Suite", 4
applications that permit freight scheduling, tracking & invoicing over
the Internet, potentially replacing fax & EDI traffic. Starts next month
for an initial group of 100 carriers.
- ABF Freight Systems On The Net ........... with
customer-specific pricing quotations over the Internet where most rate
inquiries will be interactive, with instantaneous response, including
detailed pricing information unique to a particular customer. Some more
complicated inquiries, including offshore lanes, will receive a response by
e-mail, facsimile or telephone. During expanded business hours, virtually
all inquiries will receive a reply within 20 minutes. Confidential
information is protected by encryption technology and by passwords, which
can be requested through the Internet site. ABF also has released the
"ABF ToolKit", a desktop toolbar that provides ready, one-button
access to an variety of customer productivity tools at ABF's full featured
Internet site. The ToolKit, available at no charge on the web site, can be
customized to incorporate other PC applications or Internet sites chosen by
the user. http://www.abfs.com
- i2 Steps Ahead ........... as the software company has
announced merger with InterTrans Logistics Solutions and a US$97M stock buy
out that will blend the transportation & logistics software of
InterTrans into i2’s Rhythm supply- chain planning software. The result
should be more tightly integrated applications that will embed
transportation in Rhythm’s manufacturing planning and scheduling
processes, according to an i2 release. "In industries such as
furniture, apparel & high technology, you can’t even think about
keeping transportation separate from the business constraints anymore,"
said John Kirkegaard, V.P. of logistics operations for i2. "You just
can’t be competitive that way." The merger may also improve i2’s
competitive edge in the battle with rival supply-chain software developer
Manugistics, which just completed the acquisition of ProMira Software last
- Hellmann Int'l Forwarders Charges The Net ........ as the
Miami-based forwarder has created a website devoted to shippers of
perishables. Hellmann shows its customers not only where their shipment is,
but its temperature &quality as well. Speaking at the Air Cargo Internet
Symposium 2, Hellmann CEO Gregg Borgeson said it’s a different direction
for freight forwarders. Still in the works is an application that will allow
buyers of perishables to place orders through the website. According to
Borgeson, Hellmann would not have jumped headlong into the perishables
business last year if it hadn’t been for the Internet. Hellmann plans to
launch a camera system where shippers will also be albe to "see"
there freight as well as read its temperature. Dear readers, our industry is
changing and YOU must change with it in order to maintain an edge. http://www.hellmann.net/
- BTL, SEMA To Use internet ........ as BTL, Sweden's
largest logistics, transport & forwarding group, plans to cooperate with
Sema Group, a large Int'l info technology firm based in Sweden, to provide
door-to-door delivery of products ordered on the Internet. The program will
be based on Sema Group's Broadvision, which provides shopping & sales on
the Internet. BTL will develop logistics services that will allow the goods
to be delivered to the customer's door. BTL said the plan will initially
target European-wide distribution, but it can be extended worldwide. The
cooperative initiative of BTL & Sema Group follows comparable plans
announced by FedEx for Internet commerce.
- Pacific Alaska Forwarders & American Freightways Set Deal
........... as Alaska's largest freight forwarder has announced that it has
expanded the coverage area of American Freightways to include the state of
Alaska through an exclusive marketing partnership. The alliance will provide
American Freightways' customers access to all points in Alaska, while
Pacific Alaska Forwarders' customers will gain access to American's
all-points-direct coverage of 28 states. Interchange will take place at
Chicago. Containers will move over land between Chicago & Seattle,
Washington, and by ship between Seattle & Alaska. Customers will receive
a single, through-service invoice.
- New Containers For Hub Group ......... as the giant
intermodal rail agent has contracted to lease & manage 2,000 containers
for Burlington Northern Santa Fe Railroad. The 48-foot-long, 102-inch-high
U.S. domestic containers are expected to be fully deployed by October, and
additional equipment will be added to meet demand, the companies said.
Called Hub Group Premier Service Network, the new program will combine Hub
Group's EDI- integrated nationwide network, its controlled drayage program
& asset management expertise with BNSF's extensive national intermodal
network. In related news, Hub Group (Nasdaq: HUBG) announces that it
completed the acquisition of Quality Intermodal Corp. ("Quality"),
an intermodal & truckload brokerage service provider headquartered in
- China Rails Expand ........ as the 1st all-cargo express
freight train began operations between Guangzhou & Beijing on 18 March
1998. The new service takes only 36 hours, cutting about 30 hours off the
motor carriage mode.
- CSX Intermodal & Canadian National Join NCAS
......... as the North American Container System network program speeds the
free & unrestricted interchange of 48-foot domestic containers among
member railroads. Existing members of NACS are Burlington Northern &
Santa Fe Railway Company (BNSF) and Kansas City Southern Railway Company
(KCS). NACS was established in February 1996 to create a nation-wide double
stack container network encompassing almost every major market in the U.S.
and provides shippers with an effective alternative to freely
interchangeable intermodal trailers. Customers participating in the program
will be able to lower their freight costs by reducing container cycle times.
With a dedicated fleet of over 2,500 containers and chassis strategically
located across a broad geographic network, NACS gives shippers a flexible
transportation alternative to reach all major North American markets in
Canada &the U.S. Canadian National Railway Company is Canada's largest
& North America's 6th-largest railway.
- Expeditors Above ISO Curve ............ as Expeditors
International of Washington, Inc. has now earned ISO 9002 certification for
38 of its offices in Mexico, Canada & the U.S.. This brings the number
of Expeditors' ISO 9002 certified offices to 65, representing 17 countries.
***Jensen Partners With Emery For Canada ......... as Emery Worldwide's
customs brokerage business unit has established a working partnership with
Norman G. Jensen, Inc., the customs broker and Int'l forwarder based in
Minneapolis, Minn., to provide 24-hour, 7-day/week customs clearance
services for shipments between Canada & the U.S.
- Rich Int'l Hit For O2 Generators ......... as the
grounded charter carrier is being fined US$450,000 for shipping oxygen
generators on a passenger jet, months after a similar shipment brought down
a ValuJet plane. Rich employees sent an improperly labeled box of chemical
oxygen generators on a Delta Airlines flight from Miami to Atlanta on July
10, 1996. The box didn't carry a ``cargo only'' label, which would have kept
it off all passenger planes, in keeping with federal regulations. Rich Int'l
has not flown for a year.
- Asian Flood Fear Thus Far Unfounded ........ as a Wall
Street Journal article reports that exports from Asia's cash strapped
economies have not flooded the U.S. market as many had feared, but that U.S.
consumers are still enjoying lower average import prices on a variety of
goods. Indeed, the article states that in January U.S. imports declined from
most Asian countries, with only China notching a big gain.
- Put It In U.S. Dollars? ......... as the Journal of
Commerce estimates that China's currency may be devalued by 5% in 1999 and
that China's trade surplus is expected to drop to US$16B in 1998 from US$40B
in 1997. Time for account shifts?
- "Frogwoman" Dives For Cash ........ as Gladys
Rodriguez DeRodriguez, 54, of Bogota, admitted in federal court last week
that she tried to conceal about US$81,000 underneath a short divers wetsuit
when attempting to board a flight to Colombia from Newark Int'l Airport on
Dec. 12. The money was found during a U.S. Customs pat-down search after she
told inspectors she was only carrying US$2,560 and then showed them a wallet
holding US$4,000. Bad move. As part of her plea bargain, DeRodriguez agreed
to forfeit the money and remains free on bond pending sentencing. She faces
up to 5 years in prison, a US$250,000 fine & restitution, but the actual
penalties would be far less, under sentencing guidelines.
- Dr. Frankenstein - Where Are My Drugs? .......... as U.S.
Customs agents found US$5.5M in drugs mixed in with body parts & other
hospital waste inside a linen truck. ``I've never seen anything like it,''
an agent said. ``I've seen people trying to smuggle drugs in a lot of
different ways, but there was an amputated leg in there and some
intestines.'' The Corpus Christi, TX, linen service truck was stopped early
on 15 April after a dog sniffed out drugs. Agents put on protective gear to
search. The drugs - 2,300 pounds of marijuana & 114 pounds of cocaine -
were in 103 bundles wrapped in duct tape. The bundles were hidden among
laundry bins filled with dirty rags & other hospital waste.
- A.P. Moller (Danish shipping group which owns Maersk
Line) UP with a 43% increase in profit to US$698M before gains on disposals
and special items for 1997.
- Aramex. Up for the forwarder as revenues increased
approximately 27% to US$66.3M for the year ended December 31, 1997
- Aasche Transportation Services (Nasdaq: ASHE) DOWN with
revenues for the 4th quarter of US$15.4M, a 16.3% decrease for same period
- Atlas Air.(NYSE:CGO) UP with net income for the quarter
ended March 31, 1998 of US$5.3M, or $.24 per share, the 2ndbest such quarter
in its history, and a 6% increase over the net income of US$5.0M, or $.22
per share, recorded for the year-earlier period.
- C.H. Robinson (Nasdaq: CHRW) UP as 1st quarter of 1998,
gross revenues increased 16.0% to $468.2M.
- Continental Airlines (NYSE: CAI.B, CAI.A) UP with record
1st quarter pre-tax income of US$137M, an 11% improvement over 1st quarter
- Fritz Companies, Inc. (NASDAQ:FRTZ) UP as 3rd quarter
revenues increased by 13.6 percent to US$307.2M. For the 9 month period,
revenues were US$977.5M, a 15.4% increase.
- Hyundai Merchant Marine. DOWN as net income plunged 61%
in 1997, to US$9M from US$23M a year earlier, as a result of heavy financial
and currency losses. Operating profit was up 71% in U.S. dollars, to
US$303M, but the increase was wiped out by US$494M in non-operating
- Intercargo Corporation (NASDAQ:ICAR) UP with net income
for 1997 of US$31.8M compared to US$6.4M in 1996. Earnings per share for
1997 were $4.14 on 7,671,000 weighted average shares outstanding. Included
in net income for 1997 is an after tax gain of US$29.4M from the 3rd quarter
sale of substantially all of the Company's investment in Kingsway Financial
Services, a Canadian insurance organization.
- M.S. Carriers. UP as operating revenues for the first
quarter increased 26.4 percent to $117.2 million from $92.7 million in the
same period 1997. Operating income for the 1st quarter was US$8.4M, a 41.8%
increase from US$5.9M in the same period 1997. Net income for the quarter
ending March 31, 1998 was US$4.4M, a 46.4% increase.
- OOCL. PLUNGED as profit after tax dropped to US$24.2M,
compared with 1996 year-end figures of US$107.2.
- Neptune Orient Line. DOWN with a US$40M loss for 1997 as
a result of extraordinary charges connected with the Singapore company's
acquisition of APL Ltd.
- Northwest Airlines (Nasdaq: NWAC) UP with net income of
US$71M for the three months ended March 31, 1998, increase of 9.9%.
- Roadway Express, Inc. (NASDAQ:ROAD) UP with net income of
US$6,609,000, or $0.32 per share (diluted), for 1st quarter, a 19.7%
increase over last year.
- Sea-Land. UP as cargo imbalances &falling rates in
the transpacific caused 1st-quarter operating income to drop to US$15M from
US$41M a year earlier.
- U.S. Xpress Enterprises (Nasdaq NMS: XPRSA) UP with net
income for the 1st of US$3.28M, or $.22 per common share - diluted, an
increase in net income of 51% over last year.
- USFreightways Corp. (NASDAQ:USFC) UP with net income for
the 13 weeks ended April 4, 1998 of $13,729,000, a 41% increase.
- Yellow Corporation. DOWN with net loss for the 1st
quarter of US$647,000.
- Zim Israel Shipping Co. DOWN as it says "fierce
competition" contributed to a 4th-quarter loss of US$7.2M.
- Air Cargo Internet Symposium 2 A Success ............ as
the buzz in transportation this week is about the Air Cargo Internet
Symposium 2, co- sponsored by the Journal of Commerce & Oakland Int'l
Airport. The conference, also organized by Michal Douglas, moderator of the
Usenet misc.transport.air- industry.cargo group, featured speakers from UPS,
United Airlines, DHL, forwarder-broker attorneys Countryman & McDaniel
and others. If you missed the show in Oakland, you can now hear speeches via
RealAudio, download text versions of the speeches as well as the PowerPoint
presentations from a special web site. This is a MUST for all
forwarder-brokers who are interested in the future of our industry as it
will continue to take shape in EDI and the Internet http://www.coastalair.com/acis2-98/main.htm
- LAX Ranked #1 For 5th Straight Year ......... as Los
Angeles Int'l Airport has earned the top rating as ``Best Cargo Airport in
North America'' through an audited survey conducted among 13,000 readers of
Cargonews Asia. ``We are extremely gratified with our selection again this
year,'' said John Driscoll, Ex. Dr. of the Los Angeles World Airports. ``It
is an important recognition of the quality of service our customers receive
from our airport and the local industry. It also shows the leadership role
our city plays in Pacific Rim commerce.'' In 1997, Los Angeles handled the
2nd greatest freight & mail tonnage in the world -- 2.1 million tons, an
increase of 9.2% over 1997. More than 843,000 tons of cargo passing through
LAX is Int'l in origin or destination. The value of this Int'l LAX cargo is
more than US$62B. LAX also won the top ranking for the second consecutive
year in the category ``Best Air Cargo Terminal Operator -- North America.''
Readers picked Los Angeles over New York's JFK and Chicago. LAX first won
the award in 1994 -- the first year there was a North American airport
category. It has held the title since, defeating all other major U.S. cargo
airports, including New York, Chicago, San Francisco, Atlanta, Seattle &
- If Its UPS, It's Guaranteed ........ as next month,
United Parcel Service will offer a money back guarantee that truck delivered
business packages will arrive on time. The shipping giant hopes to boost its
post strike image with the guarantee, which takes effect May 4. UPS will be
the 1st company in the industry to guarantee its ground deliveries. The
guarantees will apply to 7 million deliveries per day. All other UPS
services, prices and delivery schedules will remain unchanged. Atlanta-based
UPS already guarantees, for an extra fee, on-time delivery for overnight
shipments by air. Though planned before last year's Teamsters strike,
Sternad said, the new guarantee will prove ``that our service is not back,
but better than ever.''
- Lufthansa Declares A Revolution .......... as April 1 saw
the carrier begin a new era of "Time Definite Services" &
guarantees. A new set of rates comes with the program. Forwarders are seen
to favor the plan, saying it is exactly where the industry should be
heading. However, there are skeptics. United Airlines and it's "Cargo
2000" study group plan to announce plans for a similar program within
months. In related news, falling freight volumes from Europe to Asia have
prompted Lufthansa Cargo to offer reduced rates on last minute bookings on
- New U.S. Wings West .......... as the U.S. Dept. of
Transportation has tentatively awarded 6 U.S. airlines 106 new weekly
flights to Japan from 13 U.S. cities under the new U.S.-Japan air services
agreement U.S. carriers tentatively gaining new rights are American,
Continental, Delta Air, Hawaiian, Northwest & TWA. Cities in the United
States tentatively receiving new service to Japan are Atlanta, Boston,
Chicago, Dallas/Fort Worth, Detroit, Houston, Maui, Hawaii, Los Angeles,
Newark, New York, Portland, San Francisco & St. Louis. Note, however,
that airlines are to expected be charged extra for flying over Japanese air
space from the start of the 1999 financial year, it has been revealed.
- U.S. Shippers Choose Airborne For 4th Year .......... as
the Business Consumer Guide has recommended Airborne Express for overnight
& next afternoon shipment of letters and small packages anywhere in the
U.S. for the 4th year in a row. The independent study of all major shippers
was conducted by the Beacon Research Group, Inc., of Watertown,
Massachusetts -- an organization established to provide business decision
makers with credible information and advice on goods, services, and
operations. Results are published in the Business Consumer Guide, which
ensures accuracy & avoids bias with its strict policy against accepting
advertising, free products or services.
- Delta To Have Mexican Stake ......... as sources report
it will obtain an interest in Cintra, holding company for the Mexican
airlines Aeromexico and Mexicana de Aviacion, once Aeromexico sells its 35%
of Aeroperu. The move will give private owners a majority in Cintra since to
date 50% of the stock has been held by the 2 Mexican airlines and 50% by the
- Delta & Swisscargo Wed ........... with an alliance
that will combine their cargo networks and allow them to market airfreight
services across a single, expanded route network. The carriers will retain
separate identities, but will use each others' cargo sales staffs in common
cities and will offer joint pricing. Implementation of the alliance will
begin June 1 in Zurich and will be completed within 18 months. Under the
agreement, the carriers will market capacity on both their own services and
through their outside partners, which could join the alliance eventually.
- Rumors Of Delta - Untied Deal Abound .......... as talk
continues that United Airlines, the largest U.S. carrier, may be on the
verge of an alliance with Delta, the nation's 3rd biggest line. Positive
indicators include the fact that UAL Corp, United's parent, is the largest
company in the US that is owned mostly by its own employees.
- Atlas Air To Speak Itallian .......... as the world's 3rd
largest cargo carrier announces that it has reached a long-term agreement to
provide B747-200 air freight services for Alitalia. Under terms &
conditions which are similar to those of Atlas Air's other ACMI contracts,
Alitalia will fully utilize an Atlas freighter to provide scheduled service
on its routes with Atlas providing the aircraft, crew, maintenance &
- Polar Air Cargo Adds Regard For Safety ........... as it
will be the first major U.S. scheduled all-cargo operator to have its entire
fleet equipped with the most advanced version of Traffic Alert &
Collision Avoidance System II (TCAS II). TCAS II constantly monitors and
displays the location of other aircraft for flight crews and automatically
directs pilots to take the appropriate avoidance maneuvers if it detects
that another aircraft is on a collision course. If both aircraft are
equipped with TCAS II, the other aircraft is also automatically warned to
take the appropriate corresponding avoidance action. Congratulations to
Michael Hartley, who has been has been appointed Polar's V.P. of Operations
& System Control. NOTE: It is understood that FedEx has no such system
and even took recent steps to REMOVE the flight deck emergency crew escape
systems, thus forcing the crew to abandon ship via a rope in the event of
- Eagle Air Gets Boardman .......... as Eagle USA
Airfreight (Nasdaq: EUSA), has announced completion of its acquisition of S.
Boardman (Air Services), a privately-held full service freight forwarder
with facilities in London, Manchester and Birmingham, England.
- Air Express Int'l Buys #1 Argentina Forwarder .........
as after 30 years servicing AEI exclusively, Argentinia's largest forwarder,
Aero Expreso Int'l will be acquired by AEI. CEO & founder Elvira L. de
Ortiz will remain for 3 years to assist the new venture.
- U.S. FAA Sees Growth ........ as in its 23rd annual
aviation forecast, the FAA predicts major U.S. airlines carrying 616 million
passengers this year, up 3.5% from last year and growing at an average 3.7%
through 2009. Int'l traffic to & from the United States by foreign &
domestic carriers was seen increasing 5.5% to 110 million passengers in 1998
with an average growth rate of 5.8% through 2009.
- FAA's Free Lunch Off The Table ......... as a report by
the U.S. Dept. of Transportation's Inspector General (I.G.) has sharply
criticized agreements with airlines to provide free training to U.S. Federal
Aviation Administration (FAA) inspectors. The program gave the FAA free
training for its inspectors at airlines' facilities in exchange for allowing
carriers to certify their own pilots & flight engineers but the
administration sets the training standards for the airlines and periodically
checks on their certifications. The I.G. contends such agreements make it
harder for the FAA to punish the carriers for safety violations. The report
found that one agreement prevented the FAA from acting unilaterally against
a violation until its officials & airline executives agreed on how to
correct the problem. Another arrangement prevented an FAA lawyer from
imposing penalties on an airline for unsafe practices. As of Jan. 1997,
there were some 30 cargo &passenger airlines participating in the
program which will now be shut down by FAA. Neither the report nor
government officials would identify which airlines had entered into
arrangements but all major airlines are part of the program.
- U.S. - France Agree ........... as an 8 April agreement
was made to expand air service between the countries over the next 5 years.
Not only will U.S. & French airlines be able to increase the number of
flights they make across the Atlantic each day, but they will also no longer
be restricted in the cities they can serve. Over the next 5 years, the
number of weekly flights will increase from 149 currently to 212 total. That
equates to a service increase of nine additional flights daily in each
direction. Airline service between the countries has remained stagnant since
1992, when France renounced its bilateral aviation agreements with the U.S.
Now, however, Air France has been pushing for a new air travel treaty to
implement fully its alliances with U.S. carriers, Delta & Continental.
To date, airlines have been unable to begin code-sharing on their flights -
the practice of ticketing passengers on each airline's planes - due to the
lack of an air travel agreement. The new pact clears the way for
- Argentina Flying High .......... as an 'Open Skies'
aviation treaty is now signed with Spain and agreed terms for a similar
agreement with the US. The agreement with Spain removes all flight
restrictions, including the number of flights an airline can operate.
Argentina has also agreed to increase flights to France & Australia and
is currently in talks with UK aviation authorities.
- U.S. - Korea Open Skies?........... as the parties will
re-open discussions about on April 22, the 3rd in a series.
- EU To Close The Open? .......... as European Union
transport commissioner Neil Kinnock has begun legal action against EU member
countries that signed an Open Skies agreement with the U.S. Commissioner
Kinnock sent a formal letter to the transport ministries of Austria,
Belgium, Denmark, Finland, Germany, Luxembourg, Sweden & the UK. Europe
is supposed to stand as a united front and make decisions through the
European Union. If the member countries don't comply, Mr. Kinnock may bring
the issue to the European Court of Justice. A major concern is that American
companies have access to markets throughout Europe, but there is no access
to the American aviation market, the single biggest in the world, for the
same European countries. Meanwhile, alliance agreement between British
Airways & American Airlines is still on hold as members of the European
Union continue to debate jurisdiction.
- Privatization In Reverse? ......... as Deutsche Post,
Germany's postal group, is to acquire a 22.5% stake in giant DHL Int'l. The
acquisition by one of Europe's largest mail companies of a share in DHL
Int'l will allow both companies to offer new services by using the other's
network but keeping distinct identities.
- JAL Boss Accepts Blame .......... as the chairman &
CEO of Japan Airlines will resign in June over in losses at the airline from
increasing competition & failed resort developments. US$1.2B in
write-offs will force the airline to post a US$752M net loss for the current
fiscal year, ending March 31.
- UPS Pilots Say OK ............ as 83% of members in the
Independent Pilots Assn. (IPA) ratified a new long-term contract with UPS
last month which continues through the year 2003. Pilots receive a 27% pay
increase through the year 2003 and improves benefits & working
conditions. UPS says the contract creates a cost framework that will allow
it to compete aggressively and grow its domestic & Int'l express
- New Taiwan Links Forged ............ as China Airlines
has made an inaugural flight between Taipei & Moscow. Continuing service
will begin this summer. Indeed, times are changing. In the other direction,
on 11 June EVA Airways will launch direct B747-400 combi services between
Kaohsiung & Los Angeles, the 1st to be operated by a Taiwanese carrier
to the U.S. from the south of the country.
- Flu Worsens For Philippines .............. as the
economic crisis has forced Air Philippines to close its station at Naga and
cut the frequency of other flights
- Int'l Women's Day Takes Off .......... as Indian Airlines
deployed 2 all-women crews for Int'l flights on 20 March to mark the
observance. Totaling 4 pilots & 13 crew, the flights flew between Bombay
&Karachi and Delhi & Kathmandu. In a further act of liberalization,
Indian will now allow forwarders the right to consolidate mixed freight from
- Amerijet Sets Up In Jamaica .......... with a 5,220 sq.
ft. facility next to the Air Jamaica cargo terminal. New service will
include B-727 freighter service between Kingston in Jamaica and islands in
the eastern Caribbean.
- Mr. Boeing's Newest Sets Distance Record .......... as
the 737-700 set a new distance record, flying the single-aisle plane nonstop
from Seattle to Berlin. The plane, 1st of the Next Generation 737 family to
enter service, weighed in at 62,248 kilos before takeoff. The plane departed
Seattle's Boeing Field at 4:26 p.m., Tuesday, 10 March and arrived in Berlin
9 hours 27 minutes later after covering 4,511 nautical miles. This breaks
the Int'l record for the 60,000-80,000-kg weight class previously set in
1993 by the MD-83 for a 3,385 nautical mile flight.
- Volumes ........... for United Air Cargo there were cargo
ton miles 262,015,000 in March , up 11.8% from a year ago. American Airlines
Cargo reported a 3.5% increase in first-quarter volume, to 496.3 million
cargo ton- miles. But Northwest Cargo ton miles (CTMs) decreased for March
year-over-year by 4.2% to 184.8 million CTMs versus 192.8 million CTMs in
1997. Hong Kong's Kai Tak Int'l Airport saw record inbound volume during
Feb.1998, increased by 25.2% to 50,558 tons, with a grand total of 104,992
tons of air cargo for the month.
The U.S. Supreme Court has ruled unanimously that the federal Harbor
Maintenance Fee is an unconstitutional tax on exports. The 9-0 decision came
less than a month after oral arguments, in which several justices strongly
questioned whether the harbor fee violates the constitution's prohibition of
taxes on exports. The tax -- US$12.5 cents on every US$100 worth of waterborne
commerce -- provides money for dredging. The Supreme Court said, however, that
the fee generated more than is spent for dredging.
Justice Ruth Bader Ginsberg said in delivering the court's opinion that
"such a fee must fairly match the exporters' use of port services and
facilities." The U.S. Supreme Court ruling clears the way for thousands of
exporters to pursue claims for refunds. The Harbor Maintenance Trust Fund is
estimated to have a surplus of US$1B and exporters are seeking refunds of some
US$400M collected in recent years.
But just wait, it can't be so easy after all these years. The Journal of
Commerce reports that key U.S. Congress lawmakers are hoping to replace the
Harbor Maintenance Fee with an "acceptable" user fee by the end of the
On 14 April U.S. Customs issued the following notice:
"On March 31, 1998, the U.S. Supreme Court declared that the Harbor
Maintenance Tax is unconstitutional as applied to exports. Until the Supreme
Court issues its mandate, which we expect to occur on or around April 25,
1998, we cannot advise exporters to stop paying the fee. Procedures to obtain
a refund of the Harbor Maintenance Tax upon exports have not been established.
The Court of International Trade has issued an order requiring the United
States to prepare a claims form by May 6, 1998, which will form the basis for
the refund process for complaints filed with the court. The court will publish
the government's proposal for comment and will hold a hearing to determine
further procedures for the refund process. Filing a protest is no longer
"The payment of Harbor Maintenance Taxes upon foreign trade zones,
passengers, domestic movements and imports will continue as usual." .....
U.S. Customs Service
The following is a letter that the FIATA Secretariat (The International
Federation of Freight Forwarders Associations) is directing to its members
concerning the next, proposed overhaul of the 1984 Shipping Act. that was voted
upon by the U.S. Senate this week. FIATA objects.
"FIATA has received a copy of a draft bill to revise the Carriage of
Goods by Sea Act [Shipping Act of 1984], which adopts certain proposals of the
AMLA (known as the AMLA Rules). The Rules started out as an effort to correct
what were considered to be deficiencies in US private maritime law. The AMLA
did not seek a general consensus from other countries before making its
proposals. The Rules encompass the complete movement of goods from origin to
final destination, and not just the sea segment. They govern all participants
in the transport, and not just ocean carriers. The Rules apply whenever goods
are loaded or discharged in a US port or received or delivered in the US. The
jurisdiction of U.S. Courts in cases involving the Rules is absolute.
The AMLA Rules also apply to all other parties who participate in the
transport, i.e. stevedores, freight forwarders, inland carriers etc. (see the
definition in the proposed Section 1 (b) of "contract of carriage").
These parties will be subject to the same rights & responsibilities under
the AMLA Rules as the ocean carrier.
U.S. legislators should not be surprised by the Int'l reaction to this
initiative. While we can understand the concerns that motivated this approach,
FIATA finds the inclusion of non-carrying parties in the legislation
objectionable. In many cases these parties are already subject to well
recognized law, both domestic and international. Wherever there are conflicts
among legal regimes, there will be uncertainty and cost, which is inconsistent
with good law making cannot be conducive to international trade.
This draft bill law enlarges the group of parties that are subject to the
responsibility of performing carrier. Any yet the legislation exempts American
domestic carriers from the Act, something that it does not do for their
counterparts in other countries where, e.g. the transport originates. To that
extent the AMLA Rules are discriminatory.
We believe that the time is right to consider the problems that induced the
AMLA to put forward this legislative initiative. FIATA is equally concerned
over these developments, but prefers to take a positive approach to the issue.
Multimodal transport is too significant to future trade to be left in a legal
limbo, subject to unilateral legislative initiatives. FIATA invites U.S.
legislators to support an Int'l Multimodal Transport Convention that replaces
the Geneva Convention of 1980."
- END OF OFFICIAL STATEMENT
- U.S. Senate Votes On Ocean Reform ........ as the 21
April vote on a Shipping Act reform bill was amended to prohibit carriers
from discrimination against forwarders, shippers' associations & NVOCCs.
An agreement between the transportation intermediaries and a coalition of
carriers, shippers, ports &labor had induced Sen. Tom Harkin, D-Iowa, to
lift his hold on the legislation. That cleared the way for the Senate to act
when it returned from its Easter recess. Senate Majority Leader Trent Lott
set time aside before the vote to allow Sen. Slade Gorton, R-Wash., to offer
an amendment which would have given NVOCCs the right to sign service
contracts with shippers. The Gorton amendment, however, was voted down by
the U.S. Senate on 21 April by a 71-26 margin and thus cleared for unanimous
Senate approval of the landmark legislation. The bill will go next to the
House, which during the last congressional session approved a more sweeping
reform bill. If the House amends this year's bill, the legislation will go
to a conference committee. Opponents of the Gorton amendment said it would
have killed the bill by unraveling the coalition of shippers, carriers &
labor that had united behind the legislation. The reform bill would allow
shippers and carriers to negotiate confidential service contracts but would
leave the Federal Maritime Commission (FMC) as an independent agency.
- No U.S./China Ocean Deal ......... as bilateral maritime
talks ended last week without agreement on pending issues. U.S.-flag
carriers hoped a recent action by the Federal Maritime Commission would help
U.S. negotiators obtain concessions from the Chinese on access to their
market. The FMC voted recently to allow China's COSCO to match competing
shipping lines' rate on one day's notice instead of 30 days notice
- Soon Your West Bound May Include An East Bound Charge
.........as cargo is piling up at ports across Asia while economic &
financial chaos continues to ravage the region. Custodial carriers may soon
have no choice but to impose surcharges to cover the expense of shipping
empty containers back to Asia from Europe & the U.S., industry experts
warn. The plunging value of many of the region's currencies means they are
importing less from the West. Forwarding executives say cargo can be held up
for up to a month as it waits for empty containers to return, depending on
the port to which it has been delivered. Indeed, COSCO Pacific has just
announced plans to purchase 50,000 new boxes. COSCO needs the new containers
to fill the gap. The company's terminals on the east coast of the mainland
shifted about 3 million TEU last year, while its parent company's ships
carried 3.5 million TEU.
- Australian Dock Dispute Widens ........... as dealings
between Patrick Stevedores & the Maritime Union of Australia became
increasingly bitter last/this week as violence broke out on the waterfront.
Patrick fired its entire 1,400 docker workforce on April 7 and has replaced
them with non-union workers. However, on 21 April Australian Federal Court
Justice Anthony North ordered the company to rehire all the Maritime Union
of Australia workers it fired & evicted from ports using private
security guards & attack dogs. ``We seem to have set in for quite a
lengthy dispute unfortunately, but we'll be hoping that it resolves itself
as quickly as possible,'' Patrick stevedoring's Chris Corrigan said in a
televised broadcast. Labor leaders said Monday that farmers are now ready to
drive trucks through waterfront union picket lines to prevent their crops
from rotting. This complicated story will continue to play out. Expect
delays as some 6,000 export containers were stranded outside the ports last
week. Expect a certain amount of chaos. Expect bad things.
- Japan Rethinks Antitrust .......... as the Japanese
government's cabinet has adopted a plan to change procedures for granting
antitrust immunity to ocean carrier agreements such as liner conferences.
The cabinet said legislation to implement the new procedures will be
submitted to Japan's Diet, or congress, after the start of next year. The
scope of current antitrust immunity would be retained, but different
procedures would be introduced. More power would be given to the Fair Trade
Commission, Japan's competition watchdog. Agreements would have to be
submitted to the commission as well as to the Ministry of Transport. The
commission would be able to ask the ministry to order carriers to modify or
cancel anticompetitive agreements.
- El Nino: Water Way Down - Rates Way Up ........... as
freight rates will rise sharply due to the Panama Canal Commission's
decision to restrict maximum draughts due to the El Nino caused drought,
industry experts report. Canal authorities announced their intention to
limit vessel draughts to 37.5 feet after March 26, and then 37 feet from
April 1. Industry insiders say the crucial rate which will be affected is
the one for Panamax-class ships sailing between the U.S. Gulf of Mexico
& Japan. In February, rates of US$17-18 per ton were being discussed,
but by March they had jumped to US$20-20.5 per ton. They are now forecast to
reach US$25 before the end is seen. Experts warn this will only be achieved
when the Canal's water levels either rise or stabilize, in July at the
- TACA Continues Slide .......... as the U.S. Federal
Maritime Commission reports for fiscal '97 that the Trans-Atlantic
Conference Agreement’s eastbound market share fell another 4% to 64%,
while westbound market share fell 2 points to 66%. Increased competition is
seen as the cause of COSCO, Yangming, & K Line's harder push in the
- Rates Increase .............. as effective 1 May, the
Transpacific Stabilization Agreement member lines APL, Evergreen, Hanjin,
Hapag-Lloyd, Hyundai, K Line, MOSK, Maersk, P&O Nedlloyd, NYK, OOCL,
Sea-Land & Yang Ming ....... will raise origin charges at Hong Kong
& Guangdong. SARA, the South Asia Rate Agreement, is implementing a rate
restoration of US$100-per TEU effective 1 June, to be applied to all
westbound cargoes - both CIF & FOB - from Hong Kong & mainland China
except Guangdong, to areas of south Asia including India, Pakistan, Sri
Lanka & Bangladesh.
- P&O Nedlloyd Completes Buy ......... with the US$36M
acquisition of the container shipping activities of Blue Star Line. P&O
Nedlloyd said the takeover will strengthen its position in the north/south
container reefer trades between Australia & New Zealand & No.
America, Europe & other regions. For the present, Blue Star will
continue to operate as before, employing 15 ships.
- L.A. Welcomes President Grant ....... as the recently
re-flagged containership M/V Neptune Ruby, now renamed the "M/V APL
President Grant," sailed into the Port of Los Angeles recently under
U.S. registry with a newly assigned American crew. The "President
Grant" is being deployed in APL's Transpacific GAM service, a route
connecting the Pacific Coast points of Oakland & Los Angeles, and
Manzanillo, Mexico with Guam, Taiwan, Korea &Japan. The ship is the 1st
of 3 vessels to be re-flagged from Singapore to U.S. registry. The
additional vessels include the "Neptune Topaz" and the
"Neptune Zircon" which will be the "M/V President
Hoover" & "M/V President Wilson" respectively, in coming
weeks. These ships will also be deployed in APL's GAM service. "The
re-flagging of the ships to U.S. registry demonstrates APL's continued
commitment to the U.S.-flag & merchant marine," said Tim Rhein,
President & CEO of APL Ltd.
- New Container Devices Debut ......... as container seal
integrity continues as a serious issue, Singapore-based Electronic Seal Pte
Ltd has developed a new electronic container seal which enables checks to be
made electronically on every container entering a port, replacing the former
random manual spot checks. South African concern D S Oliver has introduced
its "Spector ME" multi-event recording device for use in
situations where containers might be inspected several times, such as when
transiting border checkpoints or undergoing customs inspections. All such
events can be cross- referenced using the stored data. It's simple but
effective design uses a photosensitive cell activated at very low light
- A Non-Freight Event ......... as a consortium led by U.S.
based cruise giant Carnival Cruises is to buy Cunard Line from
Anglo-Norwegian conglomerate Kvaerner for US$500M.
- Singapore Breaks Throughput Record ........ as PSA Corp.
Ltd. has set records for containers handled in a single month and on a
single vessel call recently. PSA, which operates the Port of Singapore and
other terminals worldwide, handled 1.31 million TEUs in March, breaking the
old record of 1.27 million TEUs handled in October 1997. PSA also loaded
& unloaded 5,600 TEUs from the 6,600-TEU vessel M/V Susan Maersk, which
called the Port of Singapore 2 April.
- Interpool Continues Record Of Record Distributions
......... as Interpool Inc., the leading Int'l container lessor, announced a
cash dividend of U.S.$0.375 per share for the 1st quarter of 1998. The
dividend was payable on 15 April to shareholders on 1 April. The aggregate
amount of the dividend is expected to be about US$1.033M. Interpool is a
sponsor of The Cargo Letter web site
- U.S. Merchant Marine Enters The Century ....... as the
U.S. Merchant Marine Academy is at long last is starting a logistics &
intermodal studies program in August. Those enrolled in the program will
still be required to get 3rd officer licenses.
- The Un-Fortune 500 ........ as there are about 22 ships
owned by Romanian government organizations currently under detention around
the world. Some 500 crewmembers are stranded aboard the ships and US$50M is
reportedly needed to free then all. The ships are located in India, Italy,
Mexico, Singapore & Sri Lanka, among other countries. Conditions are
very bad. Local officials will not allow the crews to come ashore. Should a
crewmember try to go home, he will waive all back pay. So they
wait............ and wait, and wait. Normal prison conditions are better.
- Inventor Of "Car Carrier" Dies ......... as
Bengt Tornqvist, a sea captain who designed cargo ships that could carry
cars, died April 3 at 82. A resident of Stockholm & New York, Tornqvist
founded Scandinavian Motorships, an agent company that got automobile
manufacturers to use Wallenius Lines as their primary shipping line for
export. He was known as ``Mr. Car Carrier'' because of these ventures and
his interest in designing the roll-on, roll-off ship, or RO/RO. Its creation
in the 1940's helped spur the surge of imported cars into the United States.
The Bosporus - A Dangerous Seaway ......... major accidents
in Bosporus over last two decades include:
- Feb. 2, 1995: Ferry & passenger motorboat collide, injuring 8.
- March 13, 1994: Cypriot tanker collides with empty Cypriot freighter at
Black Sea entrance, causing several explosions & huge fire. Twenty-nine
crew die; nearly 100,000 barrels of oil spill. Waterway closed six days.
- Nov. 14, 1991: Lebanese-flagged freighter carrying livestock collides with
Philippines ship. Five crew die; 21,000 sheep perish.
- March 29, 1990: Chinese freighter holding 12.5 million gallons of gasoline
collides with Iraqi tanker. More than 500,000 gallons of gas spill.
- Nov. 28, 1988: Panama-registered tanker carrying 2,200 tons of liquid
ammonia collides with empty Turkish tanker in bad weather, allowing toxic
ammonia vapors to vent into the air.
- Sept. 24, 1985: Turkish warship splits in two after colliding with Soviet
navy ship in heavy fog.
- Dec. 15, 1979: Romanian tanker & Greek ship collide, setting off
explosions that kill 43 sailors & shatter windows along shore. Nearly
700,000 barrels of oil spill & burn for days, causing widespread panic.
- 14 March 1998: M/V Continental Beta (Maltese-registry containership) &
the passenger ferry Suadiye collided in Turkey's Bosporus Strait. No one was
injured but there was damage.
As the world is now so taken by the movie "TITANIC", we seriously
question what the response might be if the public came to know just how
dangerous is the sea. Make certain your customers know the truth. Arrange
quality marine cargo insurance for all shippers and let them see the following
Ocean CARGO disasters this month include the following
1.] 6 March. All 5 crew of the Argentine-registry tug Itacuru were killed
after a collision with M/V Las Bolinas (Panamanian- registry) in the Emilio
Mitre Channel of the Plate River in Argentina. The tug was towing a barge that
later ran aground;
2.] 8 March. tug Bellmont sank 205 miles east of Great Inagua, the Bahamas. M/V
Solaro rescued the 4 crew & took them to Trinidad;
3.] 10 March. M/V Golden Challenger (Panamanian-registry), sailing in ballast
from Venezuela to New Orleans, had an engine room fire in the Caribbean Sea;
4.] 12 March. Pirates attempted to board M/V Nam Dhiem, a Vietnamese ship, near
Cilegon, Indonesia. A 28-year-old crewmember was shot in the stomach during the
5.] 14 March M/V Alga (Russian-registry) sank while berthed at Nakhodka, Russia.
The Alga had just completed loading of timber when it rolled onto its port side;
6.] 14 March M/V Continental Beta (Maltese-registry containership) & the
passenger ferry Suadiye collided in Turkey's Bosporus Strait. There was heavy
7.] 15 March M/V Nafto Cement Two (St. Vincent-registry) and M/V Paros
(Maltese-registry) collided in Timsah Lake, at the northern end of Great Bitter
Lake, which forms part of the Suez Canal in Egypt. A sandstorm limited
8.] 15 March Bass River (U.S.-registry offshore supply vessel.) sank after
colliding with the offshore supply vessel C. Captain of Alpha Marine 10 miles
southwest of Grand Isle, La. Of the 7 crew, 3 are missing;
9.] 16 March M/V Baltic Carrier (German-registry) was in a collision with M/V
Flinterdam (Dutch-registry) in the Kiel Canal near Breiholz, Germany. The Baltic
Carrier suffered a large hole and partially sank by the stern; 9.] 17 March M/V
Amer Prabha (Cypriot-registry) suffers an engine room explosion at a river pier
south of Bangkok, Thailand, killing 3 Indian citizens. The blast occurred in the
generator area of the ship while it was loading rice for Nigeria;
10.] 20 March M/V Agat (Cypriot-registry) ran aground at Mollegrunden;
11.] 23 March M/V Demetrios 2 (Honduran-registry) ran aground on rocks 1,640
feet off western Cyprus in rough seas. The grounding was west of the Paphos
Lighthouse. All 8 crew were rescued by a Wessex HC series helicopter of the
British Royal Air Force;
12.] 21 March M/T Xin Tong (Chinese-registry) M/V MSC Houston (Liberian-registry
42,323-gt, containership built in 1994) were in a collision at the Hong Kong
harbor limits. The Xin Tong took on water in its engine room and was assisted by
tugs while the MSC Houston, which had minor damage, anchored;
13.] 26 March M/T El Bravo (St. Vincent) & M/T Shauadar (Panamanian-registr)
collided in Matanzas Bay, Cuba. The El Bravo's hull was holed & the ship
spilled some of its cargo of crude oil, which it loaded in Cuba. The Cuban
government has formed a special commission to investigate the collision;
14.] 2 April an unidentified vessel carrying recruits of the Sudanese Army
capsized in the Blue Nile near Khartoum, Sudan; 54 people were killed and 260
15.] 1 April an unidentified cargo/passenger vessel carrying about 300 people
capsized in rough seas off S.E. Nigeria on 1 April while sailing to Gabon. Only
20 people are confirmed to have survived & only a few bodies have been
found. The vessel capsized in the Bight of Bonny off the Nigerian state of Akwa
16.] 2 April M/T Enerchem Refiner (Canadian-registry) ran aground in St.
Lawrence Seaway, S.W. of Hamilton Island and E. of Stanely Island. Damages to
cargo are not known;
17.] 4 April M/V Virgin Pearl (Philippine-registry) sank near Balut Island, the
Philippines. All 24 people aboard, including the 15 crew, were rescued;
18.] 4 April M/V Vytegra (Russian-registry) caught fire north of Copenhagen,
Denmark. The fire was extinguished and the ship was towed to Copenhagen. The
fire reportedly began in the engine room after the ship took on 35 tons of
diesel fuel and spread to the accommodations & the bridge;
19.] 8 April M/V Gerda (German-registry containership) ran aground off Kotka,
Finland, in heavy fog while sailing with containers from Helsinki, Finland. The
ship was refloated & towed to Kotka. The ship's bow was holed over 13 feet.
Four empty containers were lost overboard;
20.] 10 April M/T Matsukaze (Panamanian-registry tanker.) & M/T Lilac
Princess (Panamanian- registry liquefied petroleum gas carrier) collided outside
Hong Kong. The Matsukaze was seriously damaged & spilled part of its cargo
of vegetable oil. The Lilac Princess had minor damage, was carrying butane &
liquefied petroleum gas to Zhuhai, China & has resumed its voyage. The
master of the Lilac Princess is missing;
21.] 13 April M/V Hua Ting (Chinese-registry operated by COSCO Tianjin) had an
engine room fire in the Philippines;
22.] 11 April M/V Chian Mariner (Liberian-registry.) sank about 160 miles off
Angola. All 25 crew safely abandoned the ship & were rescued by M/V
23.]15 April M/V Paris (Cypriot-registry) & F/V Marco (Belgian-registry
trawler) collided in the Strait of Dover. Damages are not reported;
24.] 16 April M/V Lyn (Danish-registry) developed a list and was abandoned off
25.] 17 April M/V Karina (German-registry containership) & M/V Maham
(Syrian- registry) collided in a storm while at Tartus, Syria. The Maham's
bridge was seriously damaged;
26.] 17 April M/T Koriana (Greek-registry.) collided with the moored M/T Jose do
Patrocinio (Brazilian-registry tanker) at Asry, Bahrain;
27.] 17 April M/V Togo Beauty & M/V Western Team (Panamanian- registry)
collided in Gatun Lake on the Panama Canal. Both have bow damage. The extent of
cargo damage is unknown.
NOTE: Due to seasonal weather there were many, many more cargo vessel
groundings, barge losses, fires & other disasters we had no room to report.
Large loss of life was reported in the fishing fleets and on ferries, but it
does not involve cargo and is nor reported. It was another BAD month at sea. We
mourn the many vessels lost.
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.
Here are our suggested world wide web sites of the week for your business,
your information and your amusement ...............
Air Cargo Internet Symposium 2 ........... text of speeches,
audio clips &photos. Go there if you missed the conference.
TIACA - 19th International Air Cargo Forum & Exposition
......... Le Palais des Congres, Paris, France, May 3-6, 1998. Get full details
& scheduling at the web site.
Connecticut Maritime Association's Virtual Conference 98
........... if you missed it, watch videos and get speech transcripts from the
Logistics Studies At "Internet U" ..............
as Professor Emilio Milian of San Francisco's Golden Gate State University has
announced the course entitled "International Logistics". The web site
has been started to accompany this class. Interested persons are invited to
visit and give suggestions.
CargoFinder .......... designed to be a central information
marketplace where both offers & inquiries of freight capacity are exchanged.
Until the launch in July, a very detailed demo-version is shown at the site.
Romeu Shipping .......ocean shipping in Spain &
Portugal. 40,000 Spanish company database..
Imagination, Inc. ...... air cargo software & tracking.
Instant links to freight tracking for over 70 airlines!
-- by Cameron Roberts for The Cargo Letter
Bobtails beware! Are you permitted to operate your truck at OAK, SFO, LAX or
LGB? Many forwarders & NVOCC’s operate fleets of +10,000 lb. rated trucks
to perform local pick ups. Many more sub this work out to local carriers.
Effective January 1,1998, the California Department of Motor Vehicles (DMV)
assumed full regulatory responsibility for licensing motor carriers of property,
except household goods carriers. Motor carriers must substantiate insurance
coverage if they are defined as Veh § 408 Motor Carriers and § 34500. Which is
to say that anyone who operates a truck with 3 or more axles and rated at more
than 10,000 lb. should consider calling the DMV. Contact the Industry Operations
Division of the DMV at 916-657-8153 and ask about AB 1683 Enactment. Request the
hand out entitled “Motor Carrier Permit” and the application. Of course
there is a fee ranging from $130 to $3290 depending on the fleet size.
-- by Dave F Jordan for The Cargo Letter
Via notice in the 30 March, Federal Register (63 FR No. 60, pages 15259
through 15261), the U.S. Customs Service has announced its Semi-Monthly
Statement Processing Prototype. The prototype will be conducted as a test under
the National Customs Automation Program (NCAP) and will commence no earlier than
April, 1998. Under the prototype, filers will take part in a periodic statement
and filing process whereby estimated duties, taxes, and fees along with the
corresponding entry summaries for a semi-monthly period are due seven days
following the end of the period. Initially, only merchandise entered or
withdrawn for consumption at Seattle, Detroit, Port Huron, Laredo, El Paso,
Buffalo, New York City, Charleston, Atlanta, Chicago, Miami, Cleveland, Los
Angeles, and San Francisco will be eligible.
Applications to participate in the prototype must be received by Rosalyn
McLaughlin-Nelson, U.S. Customs Service, ACE, 7501 Boston Blvd., Springfield, VA
22153 within 30 days of the date of the notice. Customs will accept applications
from all volunteers. However, in selecting participants, Customs will give
priority consideration to importers with certain characteristics, generally
relating to volume of imports, importation of products within specified Primary
Focus Industry (PFI) categories, automation of entry process, and previous or
scheduled involvement with Customs Compliance Assessments.
Certain delays in payment and/or defects in statements may subject
participants to liquidated damages and/or penalties and/or suspension from the
Please refer to the Federal Register (also available free of charge online at
) for full details.
DAVID F. JORDAN CONSULTING SERVICES, INC.
Intermodal . . . Or Multimodal? ___________ According to a
National Cargo Bureau advisory, the words "intermodal" and
"multimodel" may not be synonymous for insurers. The difference in the
legal arena can be significant. As an example: when referring to portable tanks
and tank containers, international guidelines clearly state that
"multimodal" is interpreted to mean the uses of sea and land, or air
and land modes. Operations involving just the land modes of road & rail are
deemed to be "intermodal."
Recently, the shipper of a portable tank placed insurance coverage for a trip
to Europe and declared that the journey was "intermodal" in nature,
that is to say, between two continental cities. However, the insurer thought
that the journey would be a road-rail risk. When a loss was incurred aboard a
small coastal freighter, the insurers refused to pay, saying that the movement
of cargo was to be only "intermodal," or by road & rail, not road
& sea, which the insurers deemed to be "multimodal."
In general, the term "multimodal" is used quite commonly in Europe,
while in the U.S., the term is "intermodal."
If this difference is important in your business, especially if underwriting
is involved, you should definitely inquire as to the exact interpretation of
terminology, so that all parties agree on a clear meaning of the terms.
Freight Abbreviations & Terms Of The Month
[an error occurred while processing this directive]
SSHEX = "Saturdays, Sundays & Holidays
FDEDANRSAOCLONL = "Freight Deemed Earned Discountless
& Non- Refundable Ship And/Or Cargo Lost Or Not Lost"
"Panamax" = the largest ship that can get thru the
Panama Canal, as governed by a physical restriction of approx 105 ft beam.
This translates into approx. 4000 TEU size container vessel.
"Post Panamax" = a vessel too big to transit Panama
Canal, and includes the 5000 TEU & 6000 TEU vessels now being delivered.
These vessels tend to be trading in Europe - Asia, or Asia - USWC service
where a Panama Canal transit is not required.