The Cargo Letter

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THE CARGO LETTER [328]
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

OUR Top Story


1. Interpool Opens New Cargo Letter Services

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 needed information.

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


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


2. Trade Ins. & Roanoke Ins. Unite

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 & services."

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.

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

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 year

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 required.

"The payment of Harbor Maintenance Taxes upon foreign trade zones, passengers, domestic movements and imports will continue as usual." ..... U.S. Customs Service

7. FIATA Expresses Reform Concern

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

8. Freight Forwarder World Ocean Briefs

9. The Cargo Letter Cargo Damage Dispatches

The Bosporus - A Dangerous Seaway ......... major accidents in Bosporus over last two decades include:

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 attempt;
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 damage;
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 visibility;
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 are missing;
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 Ibom;
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 Ataraxia;
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 N.W. Spain;
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.


OUR "D" Section: FF in Cyberspace


10. 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 ...............

Air Cargo Internet Symposium 2 ........... text of speeches, audio clips &photos. Go there if you missed the conference.
http://www.coastalair.com/acis2-98/main.htm

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.
http://www.tiaca.org/RegBroch.html

Connecticut Maritime Association's Virtual Conference 98 ........... if you missed it, watch videos and get speech transcripts from the Web.
http://www.cmaconnect.com/vc/

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.
http://internet.ggu.edu/~emilian

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.
http://www.cargofinder.com

Romeu Shipping .......ocean shipping in Spain & Portugal. 40,000 Spanish company database..
http://www.romeu.com

Imagination, Inc. ...... air cargo software & tracking. Instant links to freight tracking for over 70 airlines!
http://www.imaginationinc.com


OUR "E" Section: The Forwarder/Broker World


11. California's New Harbor/Airport Pick Up & Delivery Regs

-- 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.

12. U.S. Customs Processing Prototype Announced

-- 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 Prototype.

Please refer to the Federal Register (also available free of charge online at http://www.gpo.ucop.edu/search/fedfld.html ) for full details.
DAVID F. JORDAN CONSULTING SERVICES, INC.
DAFRJORDAN@aol.com

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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

SSHEX = "Saturdays, Sundays & Holidays Excluded"
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.

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