The Cargo Letter
THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
30 November 1998
Good Monday Morning from our Observation Deck...... overlooking the
officially designated "Cargo City" area and....... Runway 25-Right, at
Los Angeles International Airport, voted ``Best Cargo Airport in North
America''. BREAKING NEWS as FedEx & Nippon Express unite. See the story in
our 1st section. ......and we've got Pirate news!
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://cargolaw.com.
To post comments or discuss articles, go to ....... http://www.interpool.com/tcl/disc1_frm.htm.
Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel,
forwarder/broker attorneys at LAX.
INDEX to The Cargo Letter:
OUR Top Stories
1. FedEx Takes Japanese Partner
* Breaking News
2. 1999 AIR CARGO INTERNET SYMPOSIUM
* New Orleans!
* From IATA & The Journal Of Commerce
* Can Your Company Afford Not to Attend?
* January 17-19, 1999
OUR "A" Section: Trade, Financial & Inland News
3. Freight Forwarder Trade Briefs
4. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
5. Freight Forwarder World Air Briefs
OUR "C" Section: FF World Ocean News
6. FF World Ocean Briefs
OUR "D" Section: FF in Cyberspace
7. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
8. Montreal Protocol 4 Ratification
* A Look To The Future of Int'l Air Cargo
9. New U.S. Transport Related Legal Cases
10. Captain, Oh My Captain!
* What's In A Crowley Name?
* Who's On Fisrt?
11. Killings Continue In Indonesia
* Government In Crisis, People In Fear
* A Warren Levine Editorial
The Associated Press reported from Tokyo yesterday that Japan's Nippon
Express & FedEx have agreed to form a broad alliance in international
delivery services. Cooperation will begin in December when Nippon Express,
Japan's largest delivery company, starts using FedEx's international delivery
service, the Nihon Keizai newspaper said. The alliance is expected to include
joint use of parcel collection points & other facilities around the world.
FedEx, the 2nd largest transport company in the U.S. & Nippon Express also
will share information systems to track cargo deliveries, the paper said. FedEx,
which has its own network in Tokyo, Osaka & other major Japanese cities,
will contract out work to Nippon Express in areas not covered by its network.
The 2 companies hope to save money through increased efficiency at a time when
businesses worldwide are reviewing their logistic systems. The deal is expected
to be finalized by the end of Dec. Nippon aims to more than triple overseas
deliveries to 70,000 a month by Year 2000, boosting annual revenue by several
million dollars. The two firms rank among the world's top five transport
companies, and their alliance is likely to affect the strategies of United
Parcel Service of America Inc. & other competitors.
- New Orleans!
- From IATA & The Journal Of Commerce
- Can Your Company Afford Not to Attend?
- January 17-19, 1999
The third annual event sponsored by The Journal of Commerce and the Int'l Air
Transportation Association will once again gather air cargo professionals from
all over the globe to discuss how the most powerful information tool on the
planet can be harnessed to improve every aspect of your business. Last month's
U.S. ratification of Montreal Protocol IV has opened the door for electronic air
waybills. Customs can now be cleared with the click of a mouse. Hundreds of your
competitors will gain a technical edge by coming to this conference.
As an extra bonus, this year's event has been set by organizer Michal Douglas
at New Orleans famous Royal Sonesta Hotel from January 17-19, 1999. The
conference will soon be sold out. The available spaces can be arranged through
the web sites below. Make your reservation NOW!
Can your company really afford *not* to attend?
Featured Speakers From The Industry's Front Line :
Gail Blauer - V.P. Freight Marketing, Unisys Corporation
Alan Boehme, Director of Planning, DHL Worldwide Express
Guenter Rohrmann, President & CEO, AEI
Neil McCulloch, Manager of Dangerous Goods/Technical, IATA
Don Holt, Editor, Journal of Commerce
Vince Ryan, Mgr. of Global Distribution British Airways World Cargo
Chad Quinn, Sr. Business Mgr. for Transportation, Manugistics
Richard Yost, Symbol Technologies
Kurt Helwig, Pres., Electronic Fund Transfer Assn.
Michael S. McDaniel, Esq., Countryman & McDaniel
Cameron Roberts, Esq., Countryman & McDaniel
Bill Lindsey, Sr. Technical Specialist, BAX Global
Fred Luessen, Airfreight Automation Consultant
Bob Foley, Pres., Export2000 - AES/AMS Internet Gateway
Larry Mays, Program Director: Freight Management Solutions, Unisys
Dave Malone, Business Development Mgr., Cybercash
Browning Rockwell, Pres., TradeCompass
Michal Douglas - MTA-IC: The Usenet Air Cargo Newsgroup
Jim Powell, Pres., Transportation Development Group
Mike Casey, Pres., Deployment Resource Group
Brian Hermelin, Pres., Active Aero Group
Paul Page, Editor, Air Cargo World
Rowena Ahern, VP Business Development, ITM Ship
1999 AIR CARGO INTERNET SYMPOSIUM
Schedule of Events
- FIATA World Congress To Dubai ............ as `Challenges
in the New Millennium' will be the theme for the next FIATA World Congress
is to be held in Dubai in Oct. 1999. A dedicated team is already working to
ensure high standards are maintained at the conference, as were those set
during the 1998 Sydney Congress. For complete highlights & photos of the
fabulous Sydney gathering, go to: http://www.cargolaw.com/fiata_1998-1.html
- U.S. EU Talks Welcomed By Shippers ............ as
European Commission convention concerning transport law poised to replace
existing legislation would significantly simplify the legal framework for
shippers. Currently, two multimodal conventions that were drafted by the
U.N. Council for Trade and Development & the Int'l Chamber of Commerce
have failed to secure widespread support. The present regime is complex and
seen by many as a barrier to shippers who will be eager to see the law
revamped and simplified. The commission's transport directorate has entered
negotiations with the U.S. Department of Transport to draw up a convention
governing trade between the EU & the U.S. It is hoped the adoption of a
single transport law for the EU &U.S. could be broadened to cover the
rest of the world. At present, many conventions can cover a single voyage,
leaving shippers facing a tide of red tape. Issues such as liability limits
& the defense of carriers are likely to be simplified under any broader
- Approach Of The Euro .......... as debut of the new
currency is just weeks away. European Union nations are promoting the
advantages of doing business inside their borders with the Euro dollar. The
latest incentive comes from Belgium, which has launched a campaign to
attract U.S. businesses with distribution activities. Eleven European
nations will begin the 1st phase of the Euro switch in January and by 2002
all currency transactions must be in the Euro. It is hoped that the common
currency and common market, will benefit small and medium-sized American
companies, making it easier and cheaper for firms to conduct business in
- But What About The "Eurospeak"? ...............
as the Associated Press reports a disturbing trend in official European
Union documents. For example, some refer to sheep as ``grain eating units.''
In Eurospeak, the gums of your mouth are ``mucous membranes of the oral
cavity.'' There is no end to the jargon of the European Commission, which
runs the EU's day-to-day affairs, and other European institutions. Every
day, Eurocrats toss the word salad, add a little sauce and serve copious
texts brimming with such horrors as ``horizontal lending instruments,''
``diagonal cumulations'' and ``subsidiarity.'' Some Eurobabble is downright
nonsensical. A recent text spoke of ``semen from male bovine animals'' when
bull semen seems easy enough. Or how about this, from a paper on ways to
streamline EU decision-making: ``Does the Presidency's approach of applying
objective criteria to define a list of provisions for which unanimity would
remain the rule provide a suitable basis for further examination of a list
of provisions as possible candidates for QMV on the basis of their link to
the functioning of the internal market, bearing in mind also the possibility
of phasing in QMV gradually over time?'' So far, attempts to reverse this
curious trend have proven unsuccessful.
- Why Shop For Christmas? .......... as The Freight
Detective has constructed the largest Internet shopping mall on the web. No
kidding, this is the largest site you can find for secure Internet shopping
from Neiman Marcus, to Radio Shack, to Nordstrom, to Star Trek, to Edie
Bauer and everything in between, including shopping resources beyond your
imagination. Even "ShopBots"!. Over 15,000 catalogs also available
for review. Why drive and stand in line? The Cargo Letter does not make a
dime from the site. As with all our efforts, this is a free service to the
- New Industry Info Sources Launched .......... as The
Cargo Letter's "Freight Detective" has added features to
"his" powerful index of shipping tools:
- The Freight Detective Legal Research Center ........
provides Int'l transport, state & federal legal research resources
which are unmatched on the web. You can even look up the world's
"Most Wanted" criminals. Designed for lawyers professional
research, but simple enough for all of us to use. http://www.cargolaw.com/d.legal_files.html
- The Freight Detective Medical Logs ............
provides a full suite of medical resources. Examine any drug in the
world for Customs purposes or learn the latest on hazards being faced by
your employees overseas. http://www.cargolaw.com/d.medical.html
- The Freight Detective Ocean & NVOCC Center
............ provides your best guide to Conference Agreements, FMC
info, shipping schedules, service directories, maritime research, U.S.
Customs and more. Detailed ocean container data & loading info. http://www.cargolaw.com/ocean%26nvocc.html.htm
- The Freight Detective Export Center ..............
provides a full suite of tools for your shipping business. http://www.cargolaw.com/d2.export_center.html
- China - Taiwan Thaw? ........... as sources confirm that
the two countries are engaged in negotiations to arrange the joint operation
of shipping routes under a strategic alliance. The two sides met in late
October in Beijing to discuss the alliance, which will include space sharing
and joint-routes services. The source, a COSCO employee, said the
negotiations, which he called `sensitive,' will continue in the near future.
"The fact that we are even talking about this is significant," he
said. "We have made progress and will continue to talk." He said
the mainland was ready to go ahead with the program and that the final
agreement "is up to Taiwan." The plan was reportedly proposed by
China's minister of transportation, Huang Zhendong. According to the Taiwan
Economic News Service, Taiwan's Ministry of Transport & Communications
(MOTC) has agreed in principle to allow the joint operation of shipping
routes by 4 companies from Taiwan, one in mainland China and another in Hong
Kong. The 4 Taiwan companies are Evergreen, Yang Ming, Nan Tai Enterprises
Co., & Wan Hai Lines. The 2 from China & Hong Kong are COSCO and
OOCL respectively. Beijing has long urged Taiwan to open the `three links,'
(direct mail, trade & air and shipping services) with the mainland but
Taipei has been reluctant to approve such links.
- Continued Logistics Growth? ............. as a recent
survey of major logistics companies found substantial growth over the past 3
years but concluded that such growth may be difficult to sustain. Although
the study continues to find growing interest in outsourcing logistics
services, it also found a growing negative impact by 3rd-party providers on
companies' key performance measures. In addition, 17% of those surveyed said
outside providers had a negative impact on costs and 43% of users cancelled
contracts in 1998, up from 37% in 1997.
- Don't Use A Shanghaied Forwarder License ............. as
Xinhua News Agency has reported that Shanghai is taking decisive action
against illegal Int'l freight agents as part of a nation-wide campaign to
regulate the freight business. The city has already penalized 10 Int'l
freight agent accused of taking part in illegal activities. Officials say
that some representative offices have acted as agents and some have
conducted business with licenses that were borrowed or bought from other
agents, these practices being against the law. Illegal activities account
for a significant sum in tax evasion.
- Intercargo Premium Up .......... as the leading provider
of specialized insurance coverages for companies involved with Int'l trade,
such as customs brokers, freight forwarders, logistics providers, intermodal
carriers, importers & exporters has reported that net written premium
for the 3rd quarter of 1998 of US$14.97M was 30.7% higher than same period
1997. Stan Galanski, Pres. & CEO, said, "Our transformation to a
focused underwriting organization, coupled with the opening of regional
offices, has resulted in meaningful top-line growth for the quarter.
Unfortunately, this has not immediately translated into underwriting profit.
While we will continue to invest in our regionalization strategy, we are
taking steps to reduce our overall level of expenses. Intercargo has
developed an expense management initiative to reduce expenses by US$2M over
the next 12 months, focusing primarily on our HQ & Asian
operations." The Company also announced that to date it has acquired
406,400 shares of its common stock under the repurchase plan announced on 3
Sept. 1998. http://intercargo.com
- Press Takes Little Note Of Transport "First"..........
as there has been little coverage of the Russian Proton booster rocket that
carried the 1st part of the Int'l space station into orbit on 20 Nov.,
heralding the start of a new era in Int'l space transport &
colonization. The launch went smoothly, with the giant rocket soaring into
the cloudy sky above the central Asian steppes. The Int'l space station, the
U.S.-led successor to Russia's beleaguered Mir, will serve as an orbital
home for visiting astronauts for at least 15 years. The 41.2-feet Zarya, or
"Sunrise", was launched by a 3-stage Proton booster rocket. Zarya
is designed to serve as a space tugboat in the early stages of the project,
providing propulsion, power and communications. The space station will
consist of more than 100 elements that will require 45 assembly flights.
``Now, we only have 44 launches to go, about 1,000 hours of space walks and
countless problems, but because of the trust and mutual respect ... the
international space station is going to be a reality,'' NASA chief Daniel
- Can Bolero Deliver? ............. as the Bill of Lading
Electronic Registry Organization (BOLERO) , a joint venture between TT Club
& the Society for Worldwide Interbank Financial and Telecommunications
moves closer to reality. Bolero is promising an electronic bill of lading,
payment and delivery system that will move shipments through the paperless
nether world without fear of fraud or forgery. Some have termed to Bolero as
the "biggest change since containerization", but others think it
may be better for banks than shippers. Read more about Bolero on line at http://www.cargolaw.com/fiata_1998-1.html
- Comish Outlines Changes ............ as in recent
testimony before the U.S. Congress, Commissioner of Customs Kelly stated
that Customs is seeking regulatory authority to demand liquidated damages of
more than 3 times the entered value of the refused merchandise against
importers who fail to destroy or export an FDA refused product, as Customs
currently may only demand liquidated damages of three times that value. In
addition, Kelly stated that Customs will work with FDA to pursue a more
aggressive use of monetary penalties equal to the domestic or market value
of the violative merchandise for failure to destroy or export FDA refused
products (including cases in which substitution of the refused product is
discovered). Kelly added that Customs is developing enhanced technology,
such as discreet transponders attached to containers, that will allow it to
track shipping containers from the place of unlading to the Centralized
Examination Station, and will test this technology in the coming months at
ports with high volumes of suspect food imports. Last, Kelly stated that
Customs would like to see the FDA's notice of refusal also serve as Customs
notice of delivery, which he said would significantly reduce the amount of
time necessary to process non- compliant importers.
- Broker Exam On Line ........... as U.S. Customs Service
Broker License Examination & Answer Key from October, 1998, is now
posted on the Customs Web Site to familiarize potential examinees about the
nature & scope of the examination, and to let licensed brokers test
themselves as a form of continuing education. The 4-hour exam consists of 80
multiple choice questions on Customs import-export law and procedures.
Customs conducts the examination biannually on the 1st Monday in April &
October at various Service Ports. More information on Customs Brokers
examinations is at the Customs Web site.
- Customs Says "Keep Your Shirt On!"
............. as airline passengers suspected of carrying illegal drugs are
for the 1st time getting a choice from U.S. Customs agents who want to
search them: Submit to a strip search or be taken to a nearby hospital for
an X-ray. Customs began testing the X-ray option at New York's Kennedy Int'l
Airport & Miami Int'l Airport in October because the agency is looking
at ways to make such searches less intrusive and less embarrassing for
passengers and inspectors. ``We are trying to make this unpleasant but
necessary part of our jobs less unpleasant,'' said U.S. Customs Commissioner
Raymond Kelly. The X-rays could reveal drugs that had been ingested or
hidden in body cavities or underneath clothing. Not all passengers get the
option, but so far none of the passengers presented with the choice have
opted for an X-ray.
- AES Runs For Border ............. as the new system that
electronically files Shippers' Export Declarations (SEDs) for customers
exporting freight into Mexico debuts. In the AES new system, customers' SEDs
are submitted, evaluated & processed using paperless data exchanges. The
Automated Export System (AES) transmits SED data pre-departure, edits the
data & responds with a confirmation to release merchandise for export.
U.S. Customs, the Assn. of Laredo Forwarding Agents & Roadway Express
worked to establish the systems at Laredo. Roadway will be the 1st carrier
to participate in the system at Laredo along with 15 forwarders
participating initially. Shipment information will be updated instantly
through QUIKTRAK Online on Roadway's Web site or by using Roadway's Voice
Response system. http://www.roadway.com
- Columbian Air Force Branches Out ................. as
U.S. Customs Service & the Drug Enforcement Administration seized
approximately 13 pounds of heroin & 1,639 pounds of cocaine from a
Colombian Air Force C-130 that landed at Fort Lauderdale International
Airport this month. Customs inspectors drilled into pallets and discovered a
white powder which field tested positive for cocaine. The inspectors then
dismantled the pallets and discovered 1,639 pounds of cocaine within 4 of
them. Later while the agents were inside the warehouse examining the webbed
cargo net used on board the C-130, one cargo net was found to be thicker
& heavier than the others. A further examination of the suspect cargo
net revealed that heroin was actually sewn between its layers of webbing.
Five members of the Colombian air force have been arrested and Columbian Air
force commander Gen. Jose Manuel Sandoval resigned.
- The Truth About Alien Apples .........as the U.S. Customs
Service has announced that it is launching a campaign to educate businesses
in the U.S. who import foreign-made apple juice concentrate and repackage
& resell the juice, either as concentrate or as reconstituted juice.
Customs will closely monitor country of origin marking rules applying to the
repackaged foreign juices. For more than 10 years, Customs has taken the
position that imported fruit juice concentrate which is repacked in the
U.S., either as concentrate (with or without the addition of water, oils
& essences, and whether or not blended with other batches of
concentrate) or as reconstituted juice, remains a foreign product and must
be marked to indicate its country or countries of origin. This position has
been upheld by the Court of International Trade. If bulk concentrate is sold
to 3rd party repackers, importers are required by Customs Regulations to
advise the repackers to correctly indicate the country of origin on the
packages which they produce. Failure to notify the repackers may subject the
importer to marking duties & other penalties. Customs will be requiring
importers who sell concentrate to 3rd-party repackers to furnish copies of
their statements to the repackers explaining country of origin requirements
for the repacked products.
- Customs Job Search Bonanza ............ as the Customs
national recruitment drive (The Cargo Letter 
) concluded October 31, in one month yielding 53,225 qualified applicants
for Customs inspector & canine enforcement officer positions. "This
is a tremendous response," Customs Commissioner Raymond W. Kelly said.
"It will permit us to select the best qualified candidates with the
highest levels of integrity to help us protect America from illegal
drugs." Most of the Customs positions will be located along the
southern and southwest borders, plus additional locations in Los Angeles,
San Francisco, Detroit, Newark & New York City.
- Silk Can Leave Home Without Visa Card ........... as the
Journal of Commerce reports that the U.S. government has stated that it will
grant China's request to eliminate the silk visa requirement effective
January 1, 1999.
- No Cargo Damage In A Virtual Warehouse ................as
AutoSimulations simulation software tool, AutoMod, has been selected by
Ryder Integrated Logistics to perform warehousing & material handling
simulation projects in its facilities worldwide. AutoMod simulation software
is used to produce both a logical & graphical representation of a
facility that can be used for evaluating the performance of equipment and
processes. It provides a visual image of the facility operation &
calculates statistics of how the facility will perform and determine the
effects of new equipment design or system modifications. Engineers &
managers can experiment with new ideas and alternatives to ensure that
changes will work before funds are allocated and costly operational changes
are made. AutoMod simulates any manufacturing or material handling situation
including conveyors, forklift trucks, automated guided vehicles (AGVs),
automated storage & retrieval systems (AS/RS), carousels and manual
- Beetle Damage Rule Not Virtual ......... as the
Associated Press reports that U.S. efforts to halt the spread of a
tree-infesting beetle will affect some Hong Kong exports, but U.S.
agriculture officials say they don't have all the rules figured out a month
before the deadline. Hong Kong trade officials told a visiting U.S.
agriculture team that there is no justification to single out Hong Kong in
its ban on products packed in wood that is not certified to be beetle-free.
On 17 Dec., the U.S. government will impose new regulations to keep the
Asian long-horned beetle, believed to have arrived in wood packing crates
from China, away from U.S.-bound exports. The ban has angered China, which
calls it trade protectionism in disguise, and a U.S. official who is in Hong
Kong to explain things got a chilly reception. Hong Kong faces 2 issues:
What to do about goods shipped from mainland China to the U.S. via Hong
Kong, and what to do about goods bound for the U.S. that originated in Hong
Kong. Under the new rule, wooden crates & pallets bound for the U.S.
from China must undergo heat or chemical treatment, or be fumigated to get
rid of any beetles. Shipments packed in wood will need an official
certificate guaranteeing the treatment, while exports without wood packaging
must have documents declaring the contents wood-free. The shiny,
bullet-shaped Asian long-horned beetle is believed to have arrived in wooden
packing crates from its native China as long as 7 years ago. This year
alone, the pests have eaten through thousands of trees in New York &
Chicago, costing about US$11M to cut them down. Without such ``emergency
regulations'' the beetle impervious to most known pesticides or predators
could cause as much as US$138B a year in damage.
- They Should Make It A T.V. Show! ............. as UPS
continues to improve on it's new uses of the Internet. To mark the holiday
rush, UPS has a special counter on its site which records exactly how many
packages have been shipped since 23 Nov. 1998. The number is currently
around 45 million, but the company hopes to reach 295 million by Christmas.
UPS also has special packing & shipping tips for the season in streaming
- Will TNT Send You To Europe?........... as it launches a
contest to promote its global online "Price Checker" service which
allows customers to calculate the price of shipments via the TNT web site.
Customers enter info such as origin, destination and service required. The
info is fed into Price Checker and the price is displayed on the Internet
page in seconds. To kick off the new feature, TNT is awarding a trip for 2
to any European city. Entrants are requested to log on to the Price Checker
page and fill in the correct price of sending a document from the UK to Hong
Kong. Competitors are also asked to make up a snappy slogan about TNT. The
winner will be selected on December 14. http://www.tnt.com/cgi-bin/price_checker.pl
- New Circle Sales Chiefs ......... as Circle Int'l has
announced the appointments of Randy N. Wheeler, Cary R. Dittmann & John
Mugnaini as vice presidents for global sales in North America.
- Good Bye DAP ........ as the plan following MSAS Global
Logistics' purchase of Dutch Air Plus, will be to merge the
Netherlands-based freight forwarder with MSAS' present forwarding arm.
- Exceeding Kuehne & Nagel ........... as EXE
Technologies recently signed international multi-site agreement with
forwarder Kuehne & Nagel, for the installation of EXE's EXceed Supply
Chain Execution (SCE) software solution at 7 int'l Kuehne & Nagel
facilities. The companies will closely collaborate to implement this
strategic solution & install EXceed. http://www.exe.com
- Napa California Train Gets Corked ............as the
Federal Railroad Administration has ordered closed the historic Northwestern
Pacific Railroad because of safety risks & its threat to the
environment. The emergency order halts the freight line from Humboldt to
Napa counties that once was vital to the lumber industry. Northwestern
Pacific officials said they were stunned by the order. ``This is bad news,''
said Bob Jehn, a member of the North Coast Railroad Authority. ``These
trains need to continue running.'' Storm damage has made the track hazardous
with the threat of death or injury to the public or railway employees, the
federal agency said Wednesday. Thirty-two of the railroad's 127 highway
crossing signals were broken, it said. Deterioration of tracks also
threatened the Eel & Russian rivers. The 286-mile line passes through
the pristine upper Eel River canyon in northeastern Humboldt County and runs
south along the Russian River in Sonoma County, north of San Francisco.
Millions in emergency federal funds to fix the tracks have been held up for
more than a year because of questions over the railroad's accounting
- Aussies Are Calling All U.S. Fruits .......... as a U.S.
Dept. of Agriculture press release reports that the Australian Quarantine
& Inspection Service has suspended its ban on U.S. fresh fruit imports.
- MIA Y2K Conference ............. as a day entitled
"Y2K Latin American and Caribbean Trade at Risk" will go forward
on Dec. 10, 1998, from 8 a.m. - 1 p.m., in Downtown Miami, sponsored by
Miami-Dade County, the U.S. Dept. of Commerce & North-South Center
University of Miami. The failure of any of the major components of the
infrastructure of any one country -- electric power, oil & gas
distribution, telecommunications, transportation, or the financial system --
could have repercussions around the globe. Likewise, interruptions of
indispensable trade services -- customs facilities, air & sea terminals,
freight forwarders, shippers, distributors, trade financiers, etc. -- whose
operations depend upon computer systems & embedded chips could have dire
consequences. Great speakers! For info 305/670-9444, or Fax: 305/670-9459.
- We'll Stay (Under The) Home On New Year's Eve .........
as the Defense Special Weapons Agency, the U.S. agency managing the nation's
nuclear weapons stockpile is now testing its most critical computers, after
Pentagon inspectors discovered nobody had verified whether key systems could
withstand Year 2000 problems. The Defense Special Weapons Agency wasn't
alone in certifying computers Y2K safe without independent testing, said the
Pentagon's Inspector General's Office, which found only 25% of the agency's
``mission critical'' defense computer systems had been tested. The weapons
agency, according to an Oct. 30 Inspector's General audit, did not complete
independent testing of 3 critical systems before classifying them Y2K
compliant as required by a Defense Department management plan. The agency
has since tested 2 of those but still needs to test the 3rd, according to
the report. On its own, the weapons agency tested the critical Nuclear
Management Information System and two of 10 non-critical systems, all
classified as Y2K compliant, the audit said. The agency agreed with the
audit findings, although its acting director, George Ullrich, said in a
Sept. 30 letter to the IG's office that agency officials had been unaware
that independent testing was needed to verify a system wouldn't crash in the
year 2000. >> The Cargo Letter's publisher's brother is a officer of
the Agency. Bro, please reset the date clock on those nukes!
- Amertranz Worldwide Holding Corp. UP for the fiscal 1st
quarter ended September 30, 1998, with net income of US$14.8M or $1.74 per
share ($0.96 diluted), compared with a net income of US$230,005, or $0.03
per share ($0.01 diluted), for the fiscal 1st quarter ended September
- AMR (American Air Lines). UP with record 3rd quarter net
earnings of US$433M, or US$2.49 per common share diluted, a 34% improvement
over net earnings of US$323M during the same period in 1997. These are the
highest quarterly earnings in the company's history, and the 6th consecutive
quarter of record earnings for AMR.
- Circle Int'l. UP with a revenue increase of 6% for the
3rd quarter at US$191M. Operations gained 16% as compared to a year earlier,
to end the period at US$7.3M , although this figure did not include
restructuring costs of over US$8M which left the company down by US$544,000
from US$7.3M net profit in 1997's 3rd quarter.
- Eagle USA Airfreight. UP as revenues for the fourth
quarter increased 33% to US$121.8M from US$91.4M in the same period of
fiscal 1997. Net income for the quarter totaled US$5.5M, a 5% increase over
US$5.1M in the 4th quarter of fiscal 1997.
- Expeditors Int'l of Washington. UP with record quarterly
net earnings of US$14.2M for the 3rd quarter of 1998, an increase of 21%.
Net revenues for the 3rd quarter of 1998 increased 16% to US$92.9M as
compared with US$80.2M reported for 3rd quarter of 1997.
- Hawaiian Airlines. UP with the highest quarterly net
profits in the company's 69-year history at US$6.1M, or US$0.15 per diluted
share, for the quarter ended September 30, 1998, compared to a net profit of
US$1.4M, or US$0.03 per diluted share, for the same quarter last year.
- Kitty Hawk. DOWN with earnings for its 3rd quarter ended
September 30, 1998 of US$2.5M or US$.15 per diluted share, compared with
proforma earnings of US$4.9M or US$.29 per diluted share for the year-ago
quarter. Total revenues for the quarter increased to US$175.1M, up from
proforma US $166.0M for the prior year period.
- LanChile. DOWN for the quarter ended September 30, 1998,
with a reported net income of US$2.1M, compared to the profit of US$17.0M
reported for same period 1997.
- NYK Line. UP as operating income for the first 6 months
of the fiscal year ending 30 September, rose 23% to Y14.9 billion while
revenues were up 9% to Y341.5 billion. There was only a 1% increase in net
income for the year's 1st half to Y2.17 billion. 42.3% of revenues were
attributed to line revenue, followed by tramp & specialized carriers at
42.6% and tankers at just over 14%.
- The Freight Connection Inc. DOWN with revenues for the
1998 3rd quarter of US$7.03M, compared to US$6.83M in the 1997 3rd quarter,
an increase of 3%. Net revenues for the 3 months ended Sept. 30, 1998 rose
7% to $651,000 compared to US$608,000 for the prior year period. The company
had a net loss for the 1998 third quarter of US$13,000, or US$(.00) per
share compared to net income of US$105,000, or US$.02 per share for the
comparable 1997 period.
- UPS. UP with strong 3rd quarter earnings & recovery
from the 1997 strike. Profits were US$449M, or 81 cents a share, for the 3
months ended Sept. 30, compared with a net loss of US$10M or 2 cents per
share for same period last year.
- U.S. Air Sector UP............ as DHL* was the only major
U.S. airline not to record a net profit for the 2nd quarter of this year.
Combined, the 13 other carriers amassed a net profit of US$1.7B, the highest
ever for a group, gaining US$200M more than in the first quarter. For the
year ended June 1998, all majors again registered a net profit except for
DHL, UPS & TWA. Other than DHL, the airlines all recorded operating
profits, with a combined 2nd quarter total of US$3B, a US$300M jump from the
previous quarter's results. The group includes DHL, UPS, FedEx, Alaska,
America West, American, Continental, Delta, Northwest, Southwest, TWA,
United & US Airways. *DHL was included in the cited study.
- FedEx Stand Down ............ as the pilots union says it
will end its members refusal to work overtime during the Christmas holiday
period in a bid to avoid loss of profit. The pilots agreed to delay any
further job actions, including a strike, in exchange for a return to the
bargaining table and a promise from the company that it would obtain no
further out sourcing. Even so, many companies were expecting the strike and
have, therefore, made alternative freight forwarding arrangements. FedEx had
contracted other airlines to serve its global network and arranged for
trucking services for its U.S. domestic network, but the union's board says
it will not take any industrial action until after the holiday season.
Strike authorization ballots have been sent to the union's members. These
were to be counted on December 3, but under the new deal, the union will
postpone the strike for a minimum of 60 days.
- FAA Security Regs May Go On The Road .......... as the
FAA has issued a proposed rule that would condition the FAA's acceptance of
a foreign air carrier's security program on a finding that the program
requires adherence to the identical security measures that the FAA requires
of U.S. air carriers serving the same airports.
- North Atlantic Takes Lead ............. as airfreight
over the Atlantic soared by 4.5%, up to a total of a 15.9% share of the
world market while it declined 2.1% on Far East routes. This comes after a
decade of living in the shadow of the previously dominant Far East traffic.
- "One Ticket To The World"? ............... as
last Friday 27 Nov., Alitalia & KLM signed a Master Cooperation
Agreement governing their long-term alliance. The two have additionally
concluded a Passenger Venture Agreement &a Cargo Venture Agreement. The
lines plan to cooperate on a scale and intensity unique in the aviation
industry, summarized in their joint slogan: "The Alitalia-KLM Alliance:
One Ticket to the World." Alitalia & KLM have set 2 phases. During
the 1st phase, the lines will cooperate in specific markets. In the 2nd
phase later in 1999, Alitalia & KLM plan to operate substantial sections
of their passenger & cargo businesses in 2 full Joint Ventures. They
will also capitalize on cooperation in other areas with particular emphasis
on Information Technology, Fleet Utilization and Engineering &
Maintenance. Alitalia and KLM are equal partners. They have agreed that
Alitalia shall be privatized to the maximum extent possible to create a
solid capital structure and to achieve a sustainable earnings performance.
The lines have also committed to full exclusivity. Neither will enter into
any Strategic Alliance with any other air carrier without the other's prior
consent. They have agreed to coordinate decision-making related to current
partnerships, and to select and approach new partners jointly. The partners
agree that Alitalia will joint the KLM/Northwest Joint Venture Agreement for
the North Atlantic market, subject to reaching mutual satisfactory agreement
& regulatory approvals. Alitalia & KLM will build a long-term,
comprehensive Cargo Joint Venture and initiated integration of their full
freighter operations on October 25, 1998. A full Joint Venture will be
concluded in the first half of 1999, combining their air cargo businesses,
carried on full freighter, combi, & passenger aircraft.
- Northwest & Continental Forge Ahead ......... as the
carriers are proceeding with plans to align their route systems, despite an
antitrust suit challenging Northwest's plan to buy a stake in Continental.
The planned alliance initially would affect passenger operations, but is
being watched closely as a possible harbinger of future airline cooperation
on cargo. The deal gives Northwest a 14% stake in Continental but also 51%
of the voting rights on the Continental board. The U.S. Justice Dept.'s
antitrust lawsuit did not seek a temporary injunction against the alliance,
but asked for a permanent injunction to prohibit Northwest from buying
Continental stock. The airlines say that allows them to continue developing
their alliance. However, U.S. government has heard that the planned partial
acquisition of Continental by Northwest would spark a large-scale
consolidation of the airline industry. The comments were made to the U.S.
Justice & Transportation Dept.s by the American Airlines' pilots' union,
who, ultimately, want the scheme barred.
- Cathay Looses It's PAL ............... as a top
Philippine official said in a recent radio interview that merger talks
between Hong Kong's Cathay Pacific & Philippine Airlines (PAL) have
broken down and PAL had resumed negotiations with Northwest Airlines.
"What I know is that it [the merger] will no longer push through,"
Presidential Exec. Secty. Ronaldo Zamora said, adding a major disagreement
over the future of some pilots cropped up between the two airlines.
According to Mr. Zamora, PAL chairman Lucio Tan is currently in the U.S. to
trying to renew talks with Northwest which also expressed interest in taking
over Asia's oldest airline. Since the original agreement was announced, new
details have emerged revealing that Cathay would have acquired only a 20%
stake in PAL, instead of the expected 40%, with another 20% to be held by
the Int'l Finance Corporation (IFC), an arm of the World Bank.
- IATA Rates Cargo Ports ................ as the Montreal
based industry organization has named Greece as the worst European country
as far as the year's air traffic delays are concerned. Although the nation
handled just 7% of all European cargo traffic, it caused 30%of delays over
the summer. IATA is commending France for its efforts to increase capacity,
having handled 7000 peak day flights - around 25% of the European total.
Although a Capacity Plan for the year had been introduced by Eurocontrol,
just 6 out of 17 major ATC hubs boosted capacity. For the period 1989-1997,
Europe control estimated air traffic growth of 42.3% to 53.4%. IATA says it
was, therefore, not possible for any authority to claim the actual increase
of nearly 44% was unexpected. Although national ATC systems were improved on
during the period, capacity increases have not been enough to cope with the
expected growth. Meanwhile, IATA is warning ATC centers that further failure
to comply with capacity regulations could result in more costly delays next
year. Over the summer, 22% of all flights were delayed by 24 minutes on
average, with total ATC delays up almost 40% over same period 1997. IATA
says the situation is reminiscent of the "unacceptable" delay
levels reached in 1988/89.
- Air Canada Worried Over Electronic Future .............
as an Air Canada official has stressed the importance of better data
communication between airlines & forwarders if projects such as Cargo
2000 are to go ahead. The Air Canada statements came following comments on
the current problems in relaying electronic freight messages. Many value
added networks (VANs) designed to change EDI messages like status requests
& airway bills into a readable format for forwarders or airline systems,
are reported failing. For example, a series of recent tests on transmissions
of forwarders airway bills linked to the Cargo 2000 project, recorded an
unreasonable large number of rejected transmissions. Consequently, airlines
are still having to employ manual audit checks on AWBs to make sure the
right information is received. Forwarders are telephoning airlines about
space reservations, negating the purpose of automation.
- Universal Solution? ........... as LAX based consolidator
Universal Air Cargo says it has installed integrated software called
"Deliverance" from Eagle Datamation that does what Cargo 2000
members are trying to do with their common bar coding & delivery
standards. Smaller cargo companies have largely been on the outside looking
in as 17 large Int'l forwarders & 20 large airlines have coordinated
advances under the banner of the"Cargo 2000" IATA interest group.
- Palestine Gets An Airport ............. as Gaza Int'l
Airport received its 1st aircraft last week. Although Gaza is on the
Mediterranean coast, the Palestinians do not yet have a seaport. So imported
shipments go directly to Israeli ports & customs inspections.
Palestinian businessmen have needed to apply for Israeli permission to
travel abroad and be allowed back in. When permission is granted, it is
usually through land routes, rarely from Israel's Int'l airport near Tel
Aviv. Crossing on foot from Gaza to Egypt means going through Israeli,
Palestinian & Egyptian checkpoints. Now, however, there is a direct
alternative. Israel will pre- approved all flight schedules & passenger
lists, although no Israeli will sit in the control tower or operate any area
of the airport. Built with US$75M in contributions mainly from Japan, Gaza
Int'l has one 2-mile-long runway -- long enough to accommodate all but the
biggest jumbo jets. Palestine Airlines, which already runs a twice-weekly
flight to Jordan from a small airstrip in Egypt, will now operate out of
Gaza Int'l. The new "national" carrier is starting out with a
fleet of 3 planes, including a Boeing 727, a gift from a Saudi prince.
- Carib Growth Despite Hurricane Mitch ..........as The
Journal of Commerce reports that apparel & fish are helping provide air
cargo carriers in the Caribbean region with new business, although the
devastation wrought by two recent hurricanes will curtail growth. Miami
Int'l Airport, which dominates air trade between the U.S. & the
Caribbean & Central America, predicts a 4% increase in trade with the
region this year, to 185.5 million kilos. That would be about half the
percentage boost shown in recent years. For its part, DHL Worldwide Express
sees a 12.6% boost to its business in the Caribbean next year and an 18.9%
increase in Central America. Fabric &textiles flown from MIA to Central
America, where they are assembled, rose 48% in the same period to 2.6
million kilos, while fish & crustaceans imported from Central America
shot up 29% to 22.4 million kilos.
- U.S. & Italy To Open Soon ............ as the
countries have agreed on a preliminary Open Skies treaty granting each
country’s airline unlimited access to the other. Under the present
agreement, Italian carrier Alitalia and 5 U.S. airlines are allowed to fly
between the two countries. The agreement also grants one airline from each
country the right to fly up to one daily flight between 2 points in the
other country, starting 1 April, 1999.
- Air France Cargo Opens Paris Hub ........... is the
carrier opened a US$90M freight terminal at Roissy-Charles de Gaulle Airport
on Oct. 12. Called "GIXL", it is by far Air France's biggest
ground investment, exceeding the spending on its passenger terminal at New
York's JFK Int'l Airport. "Unlike some other airlines, Air France
considers cargo a business in its own right, on an equal footing with
passenger transport," Air France Chairman Jean-Cyril Spinetta told
guests at the opening of GIXL. Cargo generated 20% of Air France's Int'l
revenue and a third of its net profit in 1997. The terminal is the biggest
&most advanced cargo facility in Europe, at least until next January
when British Airways opens its US$425M complex at London Heathrow.
- SAS Goes To School With Airfreight 101 .............. as
SAS Cargo has established a comprehensive competence training course under
the name "Cargonomics". The actual meaning of Cargonomics is
economy by airfreight. Shippers mostly employ airfreight as a way to improve
the delivery time of their goods to the destination. The
"Cargonomics" line of reasoning is a general acknowledgement that
airfreight is more expensive than other transport means, in cases of
shippers comparing volume prices & weight. Once they count the cost of
goods tied up in a warehouse and sales revenues lost by delays in
time-to-market, airfreight becomes a viable alternative. Airfreight is also
a suitable means for shippers to send their goods to intercontinental
destinations. Cargonomics has issued a handbook which is also available in a
condensed brochure version. It spotlights the contribution airfreight can
make to today's logistical planning.
- BAX Gets BA At LHR ........... as British Airways
Engineering recently announced that BAX Global will manage its Supply Chain
Logistics operations located at London's Heathrow Int'l Airport (LHR). BAX
Global will provide a "split storage" concept based on the time
requirements of each particular shipment. A fast delivery store located on
or very close to Heathrow will be used for critical items needed within 20
minutes door-to-door. A 2nd store for slower, less critical parts will be
located within a 5-mile radius of the airport. According to BA, the off-base
warehouse will be operational in early spring. The fast delivery facility
will be specially built and functional by the end of 1999. In other BAX
news, Dan Crowley, a Frito-Lay VP of Planning, has accepted BAX's offer to
become the company CFO starting this morning. See the LHR photo: http://www.newscom.com/cgi-bin/prnh/19981123/LAM011
- Polar 1st To Africa ................ as Polar Air Cargo
of Long Beach, CA, becomes the only U.S. air carrier providing scheduled
freighter service between the U.S. & the African continent, extending
the reach of its global B-747F freighter services with the inauguration last
month of 2 weekly flights between the U.S. and South Africa, Kenya &
Zimbabwe. In conjunction with its new Africa route, Polar also began service
to Saudi Arabia. http://www.polaraircargo.com
- Chek Lap Kok Fall Out ......... as the chaotic opening of
Hong Kong's new airport is expecting to result in losses of several million
Deutsch marks for Lufthansa Cargo. The carrier has already lost customers
who opted to transport their shipments via alternative Asian gateways while
the CLK confusion was continuing. In Hong Kong, Lufthansa Cargo uses Asia
Airfreight Terminals (AAT) while its partner, Cathay Pacific uses Hong Kong
Cargo Terminals Ltd (HACTL). When the two forwarders failed to function
smoothly upon the airport's launch, joint freighter services between the two
carriers were adversely affected. Since then, Lufthansa Cargo has had no
shipments in either direction on its Hong Kong-Taipei routes. The government
has estimated that the earlier ban for over a month on all cargo except
perishables and essential goods will shave 0.35% off the territory's gross
domestic product. The opening of a 2nd runway for the US$20B airport will be
delayed for 6 months because its lighting system needs to be improved. Air
traffic remains 20% below the peak capacity of 37 flights per hour. Last
month, a B-747F freighter burst two tires when taking off, closing the 1st
runway & delaying about 100 flights. The 2nd runway had been scheduled
to open in December but will now wait for the US$38M lighting system. Given
this history, it was not a unexpected that the airport's CEO is Hank
Townsend is stepping down. Departure of the former International Bechtel
Inc. engineer took effect today. The move comes just days after Townsend
testified during legislative hearings that he could have been more
forthcoming about potential problems when the airport opened on July 6.
Government officials have complained they were not fully informed and
proceeded with a gala opening of the airport that left them embarrassed as
costly as computer breakdowns and systems problems crippled both passenger
& cargo services.
- But Can DHL Fix Chek Lap Kok? ............. as in
recognition of the effectiveness of its customer service training
initiative: "I make the difference", DHL Worldwide Express has won
the bronze medal in the 1998 Hong Kong Management Association Award for
Excellence in Training. In its 9th year, the award is the only one in Hong
Kong to honor companies for their training achievements. A record 27 entries
were received this year.
- Ax Falls At JAL ............ as Japan Airlines will cut
2,300 jobs over the next 3 years, reduce wages & hire foreign workers in
an attempt to restore profitability, according to president Isao Kaneko. “Right
now we are passing through a period of turbulence,” Mr. Kaneko said. The
planned job cuts will involve ground workers and will be made largely
through early retirement, transferring employees to subsidiaries &
limiting new hires. JAL employs nearly 18,000 people overall, and while
foreigners accounted for only a small fraction of the 6,300 flight
attendants at Japan's largest airline in 1991, Kaneko said he hopes to
increase that ratio to about 25% by 2001. JAL’s intent is to increase the
number of foreigners based outside Japan that it employs because few
countries have labor costs higher than those of Japan.
- New Cargo Home For Oslo ........... as the annual
throughput of cargo at the new Gardermoen airport is estimated at 100,000
tons. The airport's cargo & post terminal has a floor space of almost
19,000 square metres. The terminal consists of an admin building together
with a terminal for sorting &storage. All pallet stations are height
adjustable and have specially designed double hatchways. The sorting system
is automated with bar code scanners to allow rapid and accurate dispatch of
items. SAS Cargo & Lufthansa Cargo operate co-ordinated handling at
Gardermoen. Norwegian Post will be the largest single customer within the
- 1st 767-200 Freighter Up ........... as the 1st ever
Boeing 767-200F to be converted from a passenger configuration under a
special FAA type rating, officially entered service for Airborne Express at
LAX on 13 Nov.
- EU Says Hush! ............ as European Union officials
have agreed to ban hush kit equipt jet aircraft commencing 1 April 1999. The
move is designed to better noise-pollution standards as set out by the Int'l
Civil Aviation Organization, in the 22-member union and will include planes
registered outside the EU after April 1, 2002. The ban targets planes
retrofitted with engine hush-kits, and will affect cargo carriers that rely
on older airplanes to move freight economically. Airlines have resisted the
"no- addition' rule as it sets stricter noise parameters than the Int'l
Civil Aviation Organization.
- Will You Choose "La Grande Turtle"?
.............. as Cayman Airways is asking for help in selecting its new
fleet style. The airline of the Caiman Islands has pre-selected 6 different
themes to be reflected on its aircraft, uniforms, interiors, etc… Web
users can now mark their preference for any one of the 6 themes on the
airline’s web site. http://cayman.com.ky/com/cal/birds.htm
- But What About That Wooden Show Racket? .......... as
Amsterdam’s Schiphol airport may be closed certain nights to limit noise
pollution. The airport was issued a noise quota in December 1997 for the
whole 1998, but the quota has already been exceeded. As a result, Dutch
transport minister Tineke Netelenbos has notified airport authorities that a
controversial runway called the “Buitenveldertbaan” is to be closed
during nights of westerly winds. This in effect means the closure of the
airport because the Buitenveldertbaan is the sole runway in use during those
conditions. Now Amsterdam’s Schiphol will join Sydney in the unfortunate
night time ban.
- Peanuts Or Patches, Sir? ......... as German pilots are
calling on airlines to reduce alcohol consumption on board aircraft and to
make nicotine patches available to smokers in a bid to reduce the number of
attacks flying staff have to suffer from passengers.
- Air France Goosed At JFK.......... as New York’s JFK
Int'l airport has agreed to pay Air France US$5.3M to settle a lawsuit over
damages to a Concorde by a flock of geese that were sucked into its engines.
Air France contends the Port Authority of New York failed to perform the
required “runway sweeps'' to frighten birds away before every takeoff or
landing of a Concorde flight. In 1995, a Concorde hit a flock of geese on
landing and damaged an engine. Repairs lasted for 5 days and cost the French
- At The Heart Of UPS ............ as the express carrier
has a new Web site to provide information to employees, customers and the
public about the company's social outreach programs. The new site will
showcase the elements of a 91-year heritage of UPS community involvement and
become the central means for sharing information and getting involved. http://community.ups.com
- Transnational Aviation Systems Takes HAZMAT HIT ......... as the Miami
forwarder must pay US$100,000 in fines & restitution after pleading
guilty to violating U.S. government rules on air transport of hazardous
materials. The company will pay a US$10,000 fine & make restitution of
US$90,000 to the Miami-Dade County Fire Department. Court records show that
Transnational forwarded freight from Miami to several Central & South
American countries, on behalf of Staf Airlines, an Argentine air carrier.
- Volumes. U.S. airlines' air freight & express traffic
(RTMs) rose 7.0% in Aug., compared with the year-ago period, ATA reported.
IATA says air freight traffic fell nearly 16% in the Far East in the first
half of this year. IATA released the figure along with a bleak assessment
that Asia's economic crisis has put an end to the 4-year-old airline
industry resurgence. IATA says in a new forecast that industry-wide profits
will slide from US$8.2B in 1997 to US$2.5B this year, largely because of the
problems along the Pacific Rim. KLM Royal Dutch Airlines said its cargo
traffic during the first half of its current fiscal year rose 1%, while
capacity increased by 5%. For Northwest in Oct. cargo ton miles (CTMs)
system wide were down 13.4% from 1997's 221.6 million CTMs to 191.8 CTMs in
- Typhoon Babs Does A Job .......... as the intense Pacific
Ocean storm on 26 Oct. resulted in major cargo damage to four container
ships. No deaths or injuries were reported. On the two APL vessels there
were no known impacts to hazardous cargo on board. Typhoon Babs has been
described as a fast-moving storm featuring 40-70 foot swells & high
winds hit the ships in the Northern Pacific, approximately 2,700 miles west
of California . The vessels were M/V APL China enroute from Taiwan
(Kaohsiung), M/V APL President Adams enroute from China (Yantian), M/V MOL
Alligator Strength enroute from Japan (Tokyo) , and M/V Ever Union. The
total number of containers damaged/destroyed is still being calculated.
Where M/V APL China is concerned, several legal depositions of crew have
already been taken. Sources attending these proceedings report that some 406
containers were lost overboard with both major & minor damage to more
than 1,000 containers caused by a combination of flooding and collapsed
bays. The APL China arrived at the Port of Seattle approximately 2 days
behind schedule. The APL President Adams arrived at the Port of Los Angeles
approximately 1 day behind schedule and the MOL Alligator Strength arrived
at the Port of Los Angeles approximately 1 day behind schedule. All vessels
continued their rotations, except for the APL China which took 2 weeks to
re- enter service. A small army of lawyers & surveyors promptly arrived
to inspect the damaged cargo. At least two legal cases are already on file,
including a limitation action for the M/V APL China in the Southern District
of New York. The storm was unusually severe for this typhoon season. For a
very unique look at the damage to M/V APL China see the AMAZING photos at: http://www.cargolaw.com/apl_china.html
- U.S. Maritime Conference A Hit ................. as The
1st national conference on the marine transportation system is said to have
successfully produced a bold vision for the system's future, as Secretary of
Transportation Rodney E. Slater announced last week. The conference's vision
statement for the year 2020 states that "the U.S. Marine Transportation
system will be the world's most technologically advanced, safe, secure,
efficient, accessible, globally competitive, dynamic and environmentally
responsible system for moving goods and people." Secretary Slater said
that in order to build on the conference's work, he will form a task force
to assess the adequacy of the nation's marine transportation system. Like
the conference, which was held Nov. 17-19 in Warrenton, Va., the task force
will include private stakeholders as well as government representatives and
will treat marine transportation as a total system including waterways,
ports and their intermodal connections. The Secretary is expected to report
to Congress on the task force's findings by July 1, 1999. "The vision
statement that came out of the conference will enable us to move forward to
create a marine transportation system for the 21st century -- one that
continues to be safe, secure and environmentally sound," Secretary
Slater said. "It also will help ensure that the United States maintains
a competitive position in the global economy." The conference also
adopted guiding principles for developing strategies and action plans.
Working groups addressed issues relating to safety, security,
infrastructure, environment and competitiveness, and recommended a framework
for collaborative planning and decision making both nationally &
locally. The results of the conference will be published in the Federal
Register within 60 days and will be open for comment.
- IMB Warns Of Pirate Threat ........... as the Int'l
Maritime Bureau (IMB) has renewed its call for strong government action to
stamp out piracy in Asian waters. A spokesman for the specialist
anti-maritime crime arm of the Int'l Chamber of Commerce said: "We
would like regional governments to give priority to dealing with piracy
before it gets out of control." The spokesman added that fears were
growing for the safety of the 2 Korean & 13 Chinese crew of the 4,240
dwt Panamanian flag dry cargo vessel M/V Tenyu. The 1986-built vessel left
Kuala Tanjong on September 27, bound for Korea with a cargo of 3,000 tons of
aluminum ingots. There has been no confirmed sighting of the vessel since it
sailed but it could have been an unidentified ship which attracted suspicion
in the Gulf of Thailand in the middle of October.
- Mitsui OSK Lines & Navix To Wed .......... as the
Japanese carriers are to merge next April, forming a new company which will
operate nearly 500 vessels with assets worth over US$5.3B.
- Container Fleet Hits 4M ................... as UK based
Clarkson Research Studies reports that the standing slot capacity of the
world’s fully cellular container fleet has passed the 4,000,000 TEU mark,
with 2,459 vessels furnishing an aggregate standing slot capacity of
- P&O Nedlloyd And Maersk Become China Forwarders
............. as the Chinese Government has granted them Int'l forwarding
licenses, effective last month. P&O Nedlloyd is expected to establish a
wholly-owned logistics company in Shanghai. Maersk, which already has a
logistics operation in the mainland, joins P&O Nedlloyd as the 1st
non-U.S. foreign shippers to receive forwarding licenses from the Ministry
of Foreign Trade & Economic Co- operation. The two have waited a year
and a half to obtain the licenses through Mercantile (China) Logistics
Services Co. and P&O Nedlloyd China. The only other foreign companies
granted such permits are APL & Sea-Land. The Chinese administration
strictly guards entry of foreign players to its forwarding market and as
such the decision is a significant one. It normally only grants Int'l
forwarding licenses to foreign invested ventures in which the mainland
partner holds more than a 50% stake. This rule does not apply to U.S.
companies, enabling ACS Logistics and Buyers Consolidated, units of APL
&Sea-Land respectively, to obtain the licenses.
- COSCO Gets Keys To The Car .......... as China Ocean
Shipping (COSCO) is to operate independently from the Ministry of
Communications, according to a statement issued by Beijing . The move is
being seen as a continuation of the Chinese central governments drive to
separate business and government and seems likely to be followed by a
similar move with China Merchant Holdings. COSCO is the mainlands biggest
shipping company and controls Hong Kong-listed COSCO Pacific & COSCO
- China Smuggling On The Rise ............ as the Hong Kong
Shipowners' Assn. has warned that ships in Chinese waters must carry full
cargo documentation at all times. The latest report of the of the ICC Int'l
Maritime Bureau, entitled "Piracy & Armed Robbery Against
Ships", estimates there will be an increase in smuggling charges on
ships in Chinese waters following the creation of a new anti-smuggling force
in China. There have been a number of incidents where the Chinese
authorities have claimed ships apparently hijacked by pirates and taken to
China have been involved in smuggling. The cargoes of the vessels involved
have been confiscated and disposed of by the authorities. The latest such
incident involved the Malaysian-flag tanker M/T Petro Ranger.
- Carriers Defend HKG Rates .......... as a recent meeting
of the Federation of Asian Shippers' Councils (FASC) concluded that the
criticisms leveled at carriers fail to take into account the full background
of recent price increases implemented by carriers in major trades to and
from Hong Kong. For nearly 20 years, the price of container shipping has
been determined by the laws of supply & demand as the overall price of
containerized shipping has trended downwards. Export prices to Europe &
the U.S. today are 50% of what they were a decade ago. More recently, export
prices on these two major corridors have dropped continuously since early
1996. By the beginning of 1998, freight rates had fallen to US$1345 per FEU
to the US and $1050 per FEU to Europe - a drop of 33% and 20% respectively,
compared to late 1996. The rate decline for container shipping can certainly
be attributed to the periodic over-capacity created by carriers. The quality
& range of services within the industry has increased dramatically, but
at a steadily declining price to the customer. Just as there have been
"seller rules" periods, these have been more than countered by
"buyer rules" periods when rates have fallen with enormous speed.
Carriers will naturally seek to recover these losses as quickly as possible
when market conditions allow - not least to generate sufficient revenue to
support tonnage & container development programs. In such a
market-driven business, pricing can become erratic. A carrier which loses
$1200 per FEU over a 2 year period, as occurred in exports to the US
&Europe, will naturally seek to recover the revenue as soon as possible.
It should therefore be expected that carriers have sought this year to
recover at least part of the revenue depreciation over the past 2 years. The
carriers suggest only one third of revenue lost over the period has been
recovered, due to market forces dictating market rates in each corridor.
- Rates In The Produce Dept. ........... as the U.S. Dept.
of Agriculture's Agricultural Marketing Service (AMS) reports that it's
"Ocean Freight Rate Bulletin" is now available on the Internet.
AMS states that the bulletin provides a side-by-side comparison of rates
& services provided by shipping lines with market share for each of the
commodities and trade routes. http://www.ams.usda.gov/tmd/ocean
- P & O Nedlloyd Rises Above Asia Flu ........... as
the company reports 3rd quarter profit of US$30M, up 20% on same period
1997. The Asian economic situation was viewed as no better than in the
previous quarter, but also no worse. Cargo throughput was up in all major
sectors and showed an 11% increase on average. Europe/Asia was 246,900 TEU
compared with 230,900 in the previous 3rd quarter period, North South &
Cross Trades were up slightly at 231,700 from 230,800 TEU and North America
was 175,800 compared with 125,700 TEU. Average revenue per TEU was, however,
down by 4% over the year. A US$6M loss was sustained following the scrapping
of 5 first generation container ships of total capacity 12,000 TEU. They
have been replaced by four 6,600 TEU 3rd generation vessels. A further 3
first generation vessels will be scrapped in the final quarter of this year
and 2 more early in the new year.
- Canada Rates On The Up .......... as member lines of the
Canada Transpacific Stabilization Agreement (CTSA) are to increase rates by
US$750 per TEU, US$1,000 per 40-foot box, US$1,125 for a high-cube 40
footer, and US$1,266 per 45 foot container starting 1 April 1999. A US$300
per FEU container peak season surcharge will be levied on all shipments
between 1 June & 30 Nov, 1999, to compensate for elevated costs sparked
by equipment imbalances.
- No Deposit, No Return? ........... as the price for
marine containers are currently hovering near 20-year lows thanks to weak
demand amid the Asian slump. Analysts said Beijing's introduction of a
minimum price system in May was largely responsible for the fall in the
price of 20-foot containers. With 80% of the market, many Chinese rushed to
buy new containers before the deadline, forcing the price down to as low as
US$1,600 from $1,750 during the first half of the year. Last year,
containers cost as much as $1,900. Seasonal factors & weak demand were
also attributed to the price decline. 2nd hand prices have fluctuated to
varying degrees, with strong demand reported in the US market. Cheaper
prices can be found in Hong Kong, with over 15 year old containers costing
around US$500 compared with US$900 in the US.
- A Company Just To Deal With The Empties? .......... as
Textainer Group has announced that it's new "Textainer Logistics
Division" has officially opened for business. The mission of this new
division is to manage the worldwide repositioning of Textainer containers
from surplus to demand locations as the result of current severe imbalances
in container flows
- Rotterdam Says Get Ready Now! ........... as Port
authorities are warning ship owners that vessels entering the port must be
able to provide authorities with evidence that they are not be carrying the
Year 2000 "Millennium Bug". Are you ready? Don't wait until the
- More Souls Lost At Sea ............... as the Institute
of London Underwriters (ILU) reports loss of life from ship casualties was
greater in the first half of 1998 than in 1997, despite a reduction in the
number of total vessel losses. Lives lost rose to 159 in the period compared
with 142 in 1997, although ship casualties dipped by 12%, and fell by a
significant 44% in gross tons terms.
- Some Had Said COSCO Was Certifiable ........... as COSCO
has been awarded ISO 9002 certification, co-authorized by Norway's Det
Norske Veritas &the China Classification Society. COSCO, until recently
owned by the Ministry of Communications, now has about 600 vessels with 17
million dwt, accounting for 73.9% of China's total dwt.
- Trash Gets Trashed .......... as recent reduction in
waste paper rates from the U.S. west coast has led to a new low in the trade
to Taiwan. Although an earlier decrease fell to US$300-US$400 per FEU, the
new charge marks an all-time low at US$100 per FEU. The previous US west
coast - Taiwan low was US$275 per FEU which was implemented in 1984 after
the 1984 US Shipping Act was passed. The act resulted in the launch of an
open freight rate system which led to the demise of waste paper rates that
had been about US$1,300 per FEU. Rates for waste paper have been
particularly affected this year as there was no need for them to be included
in the Transpacific Westbound Rate Agreement's (TWRA) internal tariff, set
earlier this year.
- Long Beach Christmas Throughput Up ........... as the
equivalent of 347,462 TEUs was shipped through Long Beach in Oct. Fueled by
a modest gain in imports, container volume rose over 10% in Oct. compared
with same period 1997. Typically, Sept. & Oct. are the busy months as
the Christmas flood crests. This year's busiest month was July with a record
378,714 TEUs moving through the port. Don Wylie, Long Beach's trade &
maritime services director, "It looks like businesses were shipping a
little earlier this year", perhaps a result of last years Union Pacific
"traffic jam". Import containers increased to 180,719 TEUs in
October, a 6% gain over 1997. Export containers fell to 77,171 TEUs, down
11.4% from a year ago. Many importers apparently began shipping their autumn
cargo in the spring, fearing a repeat of last year's railroad congestion.
The carriers, terminal operators, railroads & port took preventative
measures, however, so there has been no congestion this year.
- Seattle Also Up ........... as despite a 1% slump in 3rd
quarter exports at the Port of Seattle, imports rose sharply against the
same period last year, jumping 30% to 174,535 TEU. Container volume also
made gains of 10% against 1997's 3rd quarter, to 295,524 full TEUs. Over the
year's 1st three quarters ended September 30, inbound volumes rose 26%, to
end the period at 434,391 TEU, but exports dropped 16% to 363,649 TEU.
- Space Going "Fast"? ............ as the owners
of FastShip Inc are suggesting that large ocean freight users to
pre-purchase space on its containership fleet in accordance with its plan to
provide a 7 day, door-to- door Trans-Atlantic operation in 2001. Preliminary
discussions on the agreement are currently proceeding with AEI. AEI says it
is aiming for a single point of contact within its business network.
- El Nino Spares Canal ............. as the Panama Canal's
just ended fiscal year was not affected by the El Nino weather phenomenon
which prompted draft restrictions on the canal last summer, or the Asian
economic crisis. Revenue from tolls on the canal were up nearly 11% to
US$545.7M. The Panama Canal Commission attributes the rise to higher tolls
implemented last year and an increase in traffic by larger vessels. A total
of 35.7 ships passed through the canal every day last year, 30.7 of which
were post-Panamax containerships. There is concern for the future, however,
in that the Panama Canal expected to run out of effective capacity by 2010
at the current growth rate.
- Stacktrain Derailed ................ as APL & its
parent NOL have decided to sell APL's Stacktrain unit. The companies agreed
that although the division is making a profit, the climate at the moment is
so deregulated that selling Stacktrain would make long-term sense.
Established in 1984, Stacktrain's purpose was to support APL's ocean
shipping business with land bridge service.
- Meet M/V P&O Nedlloyd Kowloon .......... as the new
giant was launched this month to be the last in a series of 4 newbuildings
for the line, with 82,700 deadweight tons & capable of carrying 6,700
containers. Although named after the Hong Kong's most famous peninsula, the
vessel will rarely berth in Hong Kong as it is deployed on Japan service.
- Vietnam Gets Pure TEU Depot ............. as Vietnam
Int'l Container Terminals (VICT), the country's 1st dedicated container
facility, is to become completely operational early next year. This will
follow a trial period to ascertain smooth operations. VICT is designed to
handle 170,000 TEU a year and has the capacity to handle and berth two
vessels of 20,000 dwt each, simultaneously.
- The Rock To Get Cans ............. as Gibraltar is
planning a 500,000 TEU a year container port facility. At a cost of US$225M,
the hub port will serve the western Mediterranean.
- FMC Holiday Gift? ......... as it is reported that the
Federal Maritime Commission (FMC) is waiving the requirement that ocean
freight forwarders &common carriers file the anti-rebate certificates
(ARCs) that are due by December 31, 1998.
- This Week In U.S. Navy History ............ as on Nov.
28, 1775, the Navy Chaplaincy was born. Navy Regulations ordered that
"The commanders of the ships of the 13 United Colonies are to take care
that divine service be performed twice a day on board and a sermon preached
on Sundays, unless bad weather or other extraordinary accidents
prevent" it from taking place.
Here are our suggested world wide web sites of the week for your business,
your information and your amusement ...............
Countering The Anthrax Threat ......... from the U.S. Air
ISO ........ Int'l Organization For Standardization.
ShipBestWay.com .......... services & directories.
Crowley Maritime .............. it's past & future in a
special Forbes Magazine Article.
Sea Companion World Index ......... great links! Providing
information on marine organizations & companies, and their products &
services. A GREAT new service!
UPS Document Exchange ....... the new service which is an
alternative to moving paper documents.
Virtual Transport Community of Spain
ProNetLink ........... import - export & trade
resources. Take a free tour.
Asia Computer Market Update ............. a free bi-weekly
newsletter delivered via e-mail & the Internet to over 90,000 readers world
wide. To receive a free subscription, direct requests to AsiaUpdate@cigasia.com.
Archives of all past issues can be found on the Web.
Internet Guide To Freighter Travel
1999 World Maritime Directory .......... for sale, a new CD.
Over 600 pages packed With details on over 14,000 maritime companies.
Maritime Week ......... get a brief, 3 week free
Transport R. Pynnonen Ltd. .......... custodial road
transportation to Russia & beyond, since 1948.
MetCrawler .......... the new search engine craze
Audio Highway......... listen to music, news and even books
on your PC for free.
Free Electronic Greeting Cards For The Holidays ...........
save a tree!
TVGrid.Com ........ customize your own personal, electronic
television viewing directory
- Changes To The Warsaw Convention
- A Look To The Future of Int'l Air Cargo
-- by Michael S. McDaniel & Cameron Roberts, Esq. for The
LAX -- 29 Nov - As reported in The Cargo Letter ,
the Montreal Protocol 4 (MP4) to the Warsaw Convention was ratified by the U.S.
Senate on September 29, 1998 (Congressional Record pages S11059). MP4 will
significantly change the existing Warsaw Convention, as adopted the U.S. in
1929. Some aspects of MP4 are certain, like the need for forwarders
&indirect air carriers to start looking up the current value of Special
Drawing Rights (SDR) to determine their limits on liability for cargo loss,
delay or damage.
Other issues are not so clear. While lawyers & courts will attempt to
"interpret" MP4, their ability to do so will be limited by the strict
construction and plain language approach utilized by Supreme Court Justice
Scalia in writing his decision for the case of Chan vs. Korean Air Lines, Ltd.,
490 U.S. 122, 134 (1989). There are exceptions to this approach, such as
ambiguity, but at what point does traditional judicial interpretation end?
According to the U.S. Court of Appeal for the 2nd Circuit in "Tai
Ping", (a recent Warsaw Convention case), traditional judicial
interpretation ends when "the language is reasonably susceptible of only
one interpretation." Likewise, in the Victoria Sales Corp. case , the Court
determined that "when the text of a treaty is clear, a court shall not,
through interpretation, alter or amend the treaty." In short, unless MP4 is
held to be unclear or ambiguous, the Court's would no doubt interpret it using
traditional methods of interpretation. However, this process may lead to greater
uncertainty. Today, without the benefit of judicial opinions, this article seeks
to give the indirect air carrier/forwarder a look into the future according to
New Article 5 of MP4 replaces language requiring that the consignor
"make out" and "hand over" an air waybill with the
requirement that an "air waybill shall be delivered" or that "any
other means which would preserve a record of the carriage to be performed may,
with the consent of the consignor, be substituted for the delivery of an air
waybill." It is this change that clears the way for the use of electronic
air waybills. Before MP4 it was clearly established that air carriers were
required to issue a "paper" air waybill. It is estimated that a
"paper" air waybill costs the air carrier an additional US$6 to US$7
per shipment to process. This savings will no doubt be realized by carriers in
the best position to create a seamless electronic cargo environment, such as
integrators and global forwarders. Moreover, it will allow air carriers to fully
participate in electronic networks, such as Bolero, and facilitate the move to a
completely paperless transportation environment. Nevertheless, smaller
forwarders and shippers will still continue to use "paper" for the
New Articles 6 & 7 of MP4 retains the language requiring that the air
waybill be "handed over" and "signed." These formalities
will continue to complicate "paper" shipments and may further
complicate the formalities required to "preserve a record of the
carriage" in accordance with New Article 5.
New Articles 8 & 9 of MP4 replaces language requiring that "the air
waybill shall contain the following particulars" or the carrier loses the
ability to limit his/her liability. Prior to MP4, Article 8 & 9 required
that stopping places for the flight be stated. This resulted in significant
damage awards in favor of shippers, as in the Tai Ping and Brink’s cases.
However, under MP4, the air waybill needs only to have "an indication of
the places of departure and destination and an indication of the weight of the
consignment" Under MP4, noncompliance with the provisions of Articles 5 to
8 does not appear to result in a loss of liability limits.
New Article 10 of MP4 gives greater protection to the carrier, expanding
consignor liability to include indemnification of the carrier if the particulars
provided by the shipper/consignor or on his behalf are the cause of damage.
New Article 13 (No Change) of MP4 continues to complicate, if not prohibit,
carrier liens on prior shipments against cargo in possession of the carrier,
which are permitted in all other modes of transportation.
New Article 18 of MP4 expressly adopts the traditional exceptions to carrier
liability: "(a) inherent defect, quality or vice of that cargo; (b)
defective packing of that cargo performed by a person other than the carrier or
his servants or agents; (c) an act of war or an armed conflict; (d) an act of
public authority carried out in connection with the entry, exit or transit of
the cargo." MP4 also expands and clarifies the damage presumption stating
that if "for the purpose of loading, delivery or transshipment, any damage
is presumed, subject to proof to the contrary, to have been the result of an
event which took place during the carriage by air."
New Article 22 of MP4 Changes the old damage limit of US$20.00 per kilo or
US$9.07 per lb. to 17 Special Drawing Rights (SDR) a unit of currency determined
by the International Monetary Fund. The new cargo liability limit will fluctuate
with currency valuations and is about US$23.15 per kilo or US$10.50 per lb.
Refer to www.cargolaw.com for the current SDR exchange rate.
New Article 25 of MP4 deletes the vagaries of a "willful
misconduct," but allows a shipper to recover beyond the limits of liability
if the shipper can prove that "the damage resulted from an act or omission
of the carrier, his servants or agents, done with intent to cause damage or
recklessly and with knowledge that damage would probably result; provided …
that the servant or agent … was acting within the scope of his
Despite a historic revision of many of Warsaw’s central points, the primary
focus is clearly on Article 5 and the ability of air carriers to use electronic
air waybills. All electronic air waybill systems are not created equal and MP4
offers little or no guidance concerning standards. The Bolero Project and the
current ocean debate on electronic tariff filing with the U.S. Federal Maritime
Commission may offer guidance, but in this rapidly changing world how much
system redundancy is required to insure the same level of reliability,
authenticity and credibility as a paper air waybill?
Read the entire Warsaw Convention and the Montreal Protocol 4 at The Cargo
Letter's "Law Navigator" feature: http://www.cargolaw.com/navigator.html
Wright v. Universal Maritime Service Corp. - U. S. Supreme Court
The United States Supreme Court unanimously vacated and remanded the Fourth
Circuit's holding that the general arbitration clause in the collective
bargaining agreement (CBA) requires Wright to use arbitration for an alleged
violation of the American With Disabilities Act of 1990 (ADA), 104 Stat. 327, 42
USC s12101 et seq. The Supreme Court reasoned that in order to disallow an ADA
claim, an arbitration clause in a CBA must clearly and unmistakably state that
such claims are subject to arbitration. Wright, a longshoreman, was subject to a
CBA and Longshore Senority Plan which contained a waiver of a federal judicial
forum for statutory claims of discrimination. The Court held that the waiver was
not clear and unmistakable because the Plan does not contain an anti
discrimination provision and it specifically limits its grievance procedure to
disputes related to the agreement. For full text: http://supct.law.cornell.edu/supct/html/97-889.ZS.html
Cigna Property & Casualty. INS. Co. v. Polaris Pictures Corp. -
9th Circuit Court of Appeal
Nos. 96-56252, 96-56789
Decided Oct. 22, 1998
Holding: The pleadings and uncontroverted evidence at trial support a
judgment of rescission of the marine insurance contract on the ground of failure
to disclose material facts in the insurance application. Polaris &U.S.
Inbanco Ltd. appealed from the district court's judgment granting Cigna Property
and Casualty Insurance rescission of a marine insurance contract on a yacht
based on the ground of fraud. The district court found Polaris &Inbanco had
purchased the insurance from Cigna with the intent to sink the yacht. The 9th
Circuit affirmed the district court's rescission judgment albeit on different
grounds. AFFIRMED. For full text: http://caselaw.findlaw.com/cgi-
El Al Israel Airlines v. Tseng - U. S. Supreme Court
Court below: U. S. Court of Appeals, 2nd Circuit
At issue in this aviation law case is whether the Warsaw Convention provides
an exclusive remedy for a passenger's injuries involving Int'l transportation if
the injuries were not sustained by an "accident" within the meaning of
Article 17 of the Convention. On May 22, 1993, respondent Tseng attempted to
board her flight to Tel Aviv. After questioning Tseng, El Al Airlines security
determined her to be a high-risk passenger. Security took her to a private room
where she underwent an intrusive search. An hour later, security determined that
Tseng did not pose a risk to the airline. Upon returning to the US, Tseng filed
suit in state court for personal and property damages resulting from the search.
The court below held that the security search of Tseng was not an
"accident" within the meaning of Article 17 but that the Warsaw
Convention does not preclude other sources of recovery for a passenger's bodily
injuries sustained in the course of international air travel.
- What's In A Name?
- Who's On Fisrt?
-- by Michael S. McDaniel for The Cargo Letter
Port tug: "Captain, emergency turn to starboard, over!"
Docking Vessel: "This is Capt. Smith, roger."
Port tug: "Negative, instruction is for the tug Captain."
Starboard tug: "This is the Captain of the tug "San Pedro",
Port tug: "Negative, negative, instruction is for the captain of the tug
Tug "Captain" : "This is the tug "Captain", our captain
is off the bridge, over."
[loud noises are heard]
Crowley Marine Services’ brand new Los Angeles-Long Beach tractor tug “Captain”
has just been renamed “Admiral”. The previous name caused communication
problems between ship captains, pilots & tug captains when the tug was
engaged in its work. There are a lot of captains in that group, but the new tug
"Admiral" now outranks them all!
- Government In Crisis, People In Fear
-- by Warren S. Levine, for The Cargo Letter
SEATTLE - 29 Nov. -- The steamy streets of Jakarta, crowded with protesters
and stained with the blood of murdered students and ethnics, continue to be the
flash point of political and secular violence in the Asian world.
Christian churches and Buddhist temples continue to be burned and bombed. 90%
of the nation's Christians are ethnic Chinese, who continue to be the targets of
violence. Last week a Roman Catholic school & a number of Christian churches
were bombed or set on fire by Muslim mobs. "They hit me with their fists
and a piece of wood as I ran out. They had knives, but I ran down a street (and
escaped)," Pastor Johannes Linandi told the Associated Press. His
Protestant church was burned down between Sunday services, the pastor reported,
which kept the death toll down in that particular attack. There are few things
to be thankful for in Indonesia in these troubled days.
Security forces have cordoned off former President Suharto's Jakarta
residence, as student protesters have attempted numerous times to breach the
perimeter of the compound, although Suharto resigned "to spare the country
further bloodshed" after the spring riots in which Chinese ethnics and
Christian clerics and citizens were raped and killed.
Protesting forces have been calling as well for the ouster of President B.J.
Habibie, under whose leadership the violence has increased and, in fact, spread
to Islamic clerics. Indonesia, the most populous Islamic country, has in the
past been known as a fairly tolerant, though not prosperous, melting pot for
Christians, Buddhists and Muslims.
The separatism of Chinese ethnics began during Dutch colonial rule, and
although the groups were physically separated by neighborhood boundaries, their
coexistence was peaceful except for a period in 1965 when a Communist coup
attempt was put down. Chinese have always been considered a target during times
of unrest in Indonesia.
General Wiranto, chief of Indonesia's armed forces, has warned that the
violence is expected to continue through the middle of next year, when the next
parliamentary elections are scheduled.
A reported seventeen people were killed recently by troops firing rubber
bullets into crowds of protesters in the Semanggi section of Jakarta.
Independent news reports filtering out of Indonesia put the death tolls at
multiples of the official number.
In the latest series of protests, at least nine buildings were burned to the
ground as troops took control of Pinrang, on Sulawesi, some 900 miles northeast
of Jakarta. "Roads to Pinrang have also been blocked by troops for security
reasons," one policeman reported to Reuters last night.
Protests & riots in Pinrang were caused by the government's detention and
imprisonment of local cooperative managers who protested the government's
refusal to pay their groups.
Official government sources attempted to defend their position by charging
the managers with embezzlement. However, the legitimacy of the government's
claims was loudly and soundly questioned when a crowd reported to be in the tens
of thousands attempted to storm the prison in an attempt to free the imprisoned
[an error occurred while processing this directive]