The Cargo Letter
THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
12 April 1999
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''. And yes, we have 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
The Freight Detective ........ http://www.cargolaw.com/detective.html
Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel,
forwarder/broker attorneys at LAX.
INDEX to The Cargo Letter:
OUR "A" Section: Trade, Financial & Inland News
1. Freight Forwarder Trade Briefs
2. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
3. Freight Forwarder World Air Briefs
OUR "C" Section: FF World Ocean News
4. FF World Ocean Briefs
OUR "D" Section: FF in Cyberspace
5. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
6. Zhu, Clinton Discuss Trade, Politics
But Clinton Vetoes WTO Bid
7. New U.S. Transport Related Legal Cases
8. Y2K - Where We Are
* Panic Now, Not later
9. "S.O.S." - You've Been Misinformed
* Nothing's In A Word
- Kosovo Nightmare ........... as the conflict in
Yugoslavia produced a logistical nightmare of how to clothe, feed, shelter
& relocate a refugee population exceeding the census of all but 22 U.S.
cities. The food, fresh water, tents, plastic sheeting, blankets, clothing,
waste disposal and medical supplies required to keep the refugees is
equivalent to feeding and housing a population greater than that of Atlanta
or St. Louis. The U.S. Transportation Command, now has been handed that
challenge and now faces the task of supplying most needs of 20,000 Kosovo
refugees headed to the U.S. base at Guatanamo Bay, Cuba. Private carriers
such as Tower & World will be assisting Transcom. On the other side of
the equation, NATO's bombing of bridges along the Danube in Yugoslavia has
left huge chunks of concrete in the river, jamming up freighter and barge
traffic along the 1,750-mile transportation artery that stretches from
Germany through the Balkans to the Black Sea. All along the Danube Valley,
shippers are scrambling to find alternative routes for cargo stuck on
hundreds of ships & barges unable to reach their destinations now that
the river has been severed at Novi Sad, Yugoslavia's 2nd largest city. Road
& rail links are clogged and rates near double. Our new web site offers
all the latest news & background from ........ The Kosovo Front. Be sure
to visit for details not available in the commercial press.
The Kosovo Front -
The Cargo Letter
- Cargo Law Web Site Flies High .......... as since our
last edition of The Cargo Letter, there have been an astounding 137,521 hits
to our transportation industry Internet portal. Our readers are taking
advantage of the hundreds of features & services for daily use, research
& reference. Our web page is your first place to turn for breaking
industry news, 24 hours a day from Reuters. Visitors can also check vessel
schedules, convert currency, find a customs form, watch live cameras at
airports & harbors, find an airport code, track cargo, follow a hot
stock, meet the 10 Most Wanted fugitives of the world, review transport law,
research HAZ MAT chemicals, take virtual vessel tours, check encyclopedias,
view dramatic photos of vessel & cargo damage, get the best price on a
rental car, find a transport industry gift for the boss, make travel
reservations ....... to name only a few of the available services. Our
newest feature "Bills
of Lading - The Past" offers both fun and a learning experience as
we examine shipping documents from the days of sail and unravel a few
- No China WTO Deal ........... as the U.S. & China
failed to strike a final deal last week for clearing China's entry to the
World Trade Organization but found accord on opening China's markets to some
U.S. farm products & more airline flights. Both President Clinton &
visiting Chinese Premier Zhu Rongji voiced optimism that an agreement for
China joining the WTO can be reached before the end of this year. Despite 4
days of marathon negotiations and a flurry of last-minute trade concessions
from China, the White House decided it needed more than Chinese negotiators
were willing to offer to sell the trade package to a hostile Congress. Be
sure to read our Warren Levine article in Part 2 of The Cargo Letter.
- China & Tiawan Trade More Than You Think ......... as
statistics from the General Administration of Customs put trade volume at
US$20.5B, up 3.3% from a year earlier. Trade between the two countries had
been on the rise in recent years and analysts expect the upward trend to
- Flu Seen As Good For Forwarders .............. as the
weaker economic climate has been seen to promote demand for third-party
logistics operations from multinational forwarders as companies look for
fresh ways to trim costs & improve performance has also helped fuel an
increase in intra-Asian trade growth. According to a recent report, some
Asian companies have been forced to rethink the idea that they can do
everything themselves. Many have made the switch from fixed-cost, in house
logistics management to a more variable cost structure based on sales
volumes with a 3rd party provider. This is not to say, however, that many
shippers still choose logistics providers based on the lowest price
available. The region's logistics infrastructure is less developed than in
both the U.S. & Europe. Asians also require more specialized services,
such as organizing manufacturing kits, cross docking or stock management.
One-country operations are often unable to meet the specialized nature of
current demand. Still, multinational forwarders are facing tough times, as
local firms often price their logistics services at or below cost.
- Geologistics Splits ............. as GeoLogistics
Americas, Inc. will divide into two independent operating units, domestic
& Int'l, each with its own line management. The Company also said its
bank credit facility had been amended to reflect revised financial covenants
required as a result of the recent operating results and $15 million of new
credit support from Company shareholders. The company said that primarily
because of a GeoLogistics Americas operating loss in the 4th quarter, it
expects to report a fiscal 1998 consolidated operating loss of approximately
US$12M on revenues of approximately US$1.5B. The operating loss for the full
year would have been approximately $8.0 million less after giving a full
year's effect to synergies obtained from the Company's July 1998 acquisition
of Caribbean Air Services. Terence Smith will join the parent corporation as
Chief Operating Officer & will be CEO of GeoLogistics Americas.
- Deutsche Post Still Buying ......... as it will add to
its recent spate of acquisitions by purchasing the European distribution
& transport division of the Royal Nedlloyd group for US$624M. As
reported here last month, Deutsche Post has recently purchased Danzas along
with a number of express & parcel distribution operators.
- Penske Logistics Europe Voted #1 ................ as it
has been named European Logistics Company of the Year by Int'l Freighting
Weekly, one of the leading transportation publications in the United
Kingdom. A panel of transport & logistics experts selected Penske
Logistics for this prestigious award. Other companies considered for the
award included DHL Int'l UK & UPS Worldwide Logistics. Fast work,
considering that Penske Logistics Europe was formed in 1997.
- Emery Goes Irish ............. as it has acquired the air
& ocean business of Walsh Western Int'l Ltd., which has been Emery's
exclusive partner in Ireland since 1995. Walsh Western was founded in 1969
and specializes in hi-tech transportation & technical delivery services
across Europe. A new HQ will be located at Dublin's Int'l Airport, to be
joined by a new office in Shannon, County Clare.
- TNT Makes Dynamite Move ........... as it has purchased
Italy's Tecnologistica, based in Milan. TNT Post Group will pay US$85M for
the company which operates warehouses in Italy, Germany, France, Spain,
Austria, Sweden & the Benelux countries, on sales of US$375M in 1997.
And TNT can put the purchase to good use, as Airborne Express is to make use
of TNT's European aviation network, and cancels its contract with Lufthansa.
Meanwhile, TNT Post Group is to cease its inter-Asian flights & will
start using local carriers. The costs of outsourcing are much lower than
running its own operations.
- Geologistics Downshifts ........... as GeoLogistics GmbH,
Germany has formed a joint venture with Porsche AG to provide enhanced Int'l
supply chain services to the car industry.
- Union Transport May Heat Up ........... as it has
acquired the ocean freight forwarding business of Furness Logistics Group.
Furness is based in Dordrecht, the Netherlands. Furness will be part of U-T
- ASG Buys .......... as the Swedish forwarding group ASG,
ASG Logistics, is to buy Norway's OVD Logistikk AS. OVD Logistikk is the
largest 3rd-party logistics company in Norway, with 138 employees &
annual sales of about US$15M.
- Hub Group Buys Self .......... as the Hub Group intends
to exercise its call options to acquire the remaining minority interest in
17 Hub operating companies around the U.S. for approximately US$110M. After
the acquisitions, the Company will wholly own all Hub Group operations in
North America and Europe with the exception of Hub Group Distribution
Services. The acquisitions will be financed through unsecured senior debt
and are expected to close this month. Hub operates through a network of over
30 offices throughout the U.S., Canada and Mexico and had 1998 sales in
excess of US$1.1B.
- U.S. Customs Lacks Basic Intelligence ............... as
it piggybacks on the Drug Enforcement Administration for tips about drug
shipments headed for U.S. borders. Because tip-sharing arrangements with
other agencies don't give him the tactical information he needs, Customs
Service Director Ray Kelly want his own intelligence unit. He says,``We need
what's coming across between 12 & 8 o'clock, and what's the color of
truck that's bringing it in, and what's the port of entry,'' the former New
York City police commissioner said in an interview with The Associated
Press. ``We have the need for real-time intelligence. We need stuff that's
coming in quickly, and we're not getting it,'' Kelly said. The Customs chief
says he enjoys ``a good relationship'' with the DEA, but would prefer to
have his employees, who are already stationed in more than 24 countries,
gather their own information. DEA & Customs have separate, overlapping
duties at the nation's ports & border crossings. Customs inspectors are
the front line of drug interdiction, searching freight & travelers. The
DEA investigates and helps prosecute drug activity. Customs is part of the
Treasury Dept., while DEA is part of the Justice Dept. Kelly said a
dedicated Customs intelligence unit would gather information on all
contraband coming to the U.S. with a focus on drugs, but a DEA spokesman
recently said he is not familiar with the idea and otherwise thinks the
current system works well, as is.
- Customs Gets Ombudsman ............ as Commissioner
Raymond W. Kelly has named Joseph M. Rees Trade Ombudsman for U.S. Customs.
Rees is now the key link between the Int'l trading community and top Customs
officials. He is also responsible for policy review, planning and counsel to
the Commissioner, Treasury officials & Congress on the quality of
service provided to the trade community. Rees chaired the board of the
Capitol Hill Hospital from 1979-88. Other activities have included: owner
and publisher of the 3 volume, loose-leaf "Standards of Medical
Care"; Washington editor for the Journal of Burn Care &
Rehabilitation; principal, Council for Excellence in Government; member,
National Advisory Board of the Center for National Policy; and guest
lecturer at Towson State University, George Mason University and USC.
- Push On U.S. Congress ............ as the "Coalition
for Customs Automation Funding" is lobbying the U.S. congress for
increased funding for Customs automation. The group, made up of trade
associations, shippers, customs brokers, forwarders & carriers, wants
more funding for the development of the Customs' Automated Commercial
Environment and maintenance of the agency's existing computer system, the
Automated Commercial System. Members believe that some of the US$800M paid
in merchandise processing fees should be channeled into the customs
- Customs Nabs Cig Smugglers ........... as Leslie
Thompson, a former R.J. Reynolds executive, pleaded guilty last month in
U.S. District Court to smuggling over US$700M in cigarettes into the U.S.,
and faces 7 years in prison. Thompson is the 1st tobacco industry executive
charged in a U.S. 4 year investigation into tobacco & alcohol smuggling
through the St. Regis Mohawk Reservation in northern New York. Prosecutors
said Thompson arranged to have the company's Canadian-brand cigarettes,
Export A's, exported to smugglers in the U.S. The smugglers avoided paying
excise taxes to the U.S. by telling U.S. Customs that the Canadian
cigarettes they were carrying were being brought into the country for export
to Russia. Instead, they were shipped to the St. Regis reservation and
smuggled across the St. Lawrence River back into Canada, thus cheating the
Canadian government of taxes as well.
- EU Customs To Drop Paper ........... as recent reports in
the European press confirm that customs procedures within the EU are soon to
be largely electronic, replacing the present system with a computerized
customs clearance system known as the Transit Computerization Project (TCP).
The new system would mean that the only documents needed would be those
accompanying the goods. Though initially aimed at land transportation, the
system will be adapted for air & ocean. Data on goods leaving a port
would be entered into the system & transmitted to the final port of
destination or transshipment port if appropriate. To be based in Brussels,
the system will include details of shipments in & out of the European
Free Trade Area. About 5,000 customs points within Europe will have access
to the information TCP provides. Initially, 5 countries are to be test
areas: Germany, the Netherlands, Switzerland, Spain & Italy.
- Industry Giant Steps Down .......... as our good friend
Donald D. Holt, editor of The Journal of Commerce has announced his
retirement today and will leave in mid-April, according to group publisher
Willy Morgan. Holt, 63, said he plans to teach, write and spend more time at
his new house in New Hampshire. He came to The Journal of Commerce as editor
in 1995, and during his tenure led a redesign of the newspaper that
strengthened its focus & stature. Holt came to The Journal of Commerce
after 17 years at Fortune. He was the editor of Fortune Int'l from
1982-1994. He has covered Int'l news for more than 30 years, including
serving as managing editor of Newsweek Int'l. Don, we will miss you.
- Annual EU Business Report Out .......... as the 8th
annual UPS Europe Business Monitor, a survey of more than 1,500 top European
business leaders, is now online. Examples of findings are that 29% of
Europe's top executives say the French are the most difficult to conduct
business with while 33% find the Germans the easiest. http://www.ebm.ups.com/
- Circle's China Forecast .......... as the multimodal
giant reports it will we be obtaining a class 'A' joint venture license in
the 2nd half of this year, and will be opening new offices in Tianjin,
Dalian & Qingdao. Circle Int'l currently has stations at HKG, Beijing,
Guangzhou, Schenzhen, Shanghai & Xiamen.
- Circle's New New York Home ............ as Circle Int'l
has dedicated a new US$15M logistics center with 100,000 square feet of
enclosed warehouse space accessed from 24 loading bays. The new logistics
center specializes in Int'l air & ocean freight transportation,
import/export customs brokerage, warehousing & distribution, and
logistics services. The multi-story complex includes a recessed material
handling system to accommodate airline pallets & cargo containers,
connecting scissor lift doors and built-in scales. It also has refrigeration
capabilities to maintain strict environmental control for perishable or
temperature-sensitive products on pallets or in airline cargo containers;
racking systems for inventory management and order fulfillment services;
security and fire suppression systems, and a dedicated trucking fleet. The
center's 27,000-square-foot office has a staff of 112 professionals.
- China Forwarder Crackdown ........... as a move against
illegal operations has seen China close down 19 freight forwarding companies
this month. The companies did not have authorization certificates from Int'l
forwarding agents, a spokesman for the Ministry of Foreign Trade &
Economic Cooperation said. The ministry also revoked licenses of 4 companies
which failed to do any business in a set time limit, as required by license.
There are 1,542 approved Int'l forwarding companies in China, 444 of which
are Sino-foreign joint ventures which handle 80% of the country's exports
- Smaller Bite of The Big Apple .............. as crime at
facilities operated by the Port Authority of New York & New Jersey fell
by 15% last year, down for the 9th year in a row. One of the biggest
reductions was at JFK where total crimes fell 25.5%. There was also a 19%
drop in total crime at the Port Newark/Elizabeth marine complex and a 21%
fall at the New York marine terminals. There was an 8% increase at Newark
Airport and crime rose 2% at LaGuardia Airport.
- FedEx Gets A Software Company ............. as it has
made a significant investment in Vastera, a provider of Int'l trade
logistics software solutions. FedEx will now sit on the Vastera board. Not
to remain "E-idle", FedEx has next closed a multimillion-dollar
alliance with Netscape to offer services in e-commerce for 13 million
members of the Netscape portal site "Netcenter". In addition,
FedEx will license Netscape's customized Internet portal service,
"Custom Netcenter", to create a FedEx Internet package shipping
portal. ....... Visit the Vastera web site. http://www.vastera.com/
- Not To Be Outdone ............. as UPS has announced a
"UPS OnLine Tools", an offering of seven advanced shipping and
logistics applications that provide businesses with new web-based
transportation technology solutions. E-commerce vendors & systems
integrators can use UPS OnLine Tools to link their intranets & Internet
web sites with UPS. The tools also enable businesses to leverage transport
information throughout their business processes, from order entry to
accounts receivable to inventory control. The new system includes: Enhanced
Tracking, Shipping & Handling- (enables merchants to customize their
rate tables), Address Validation (catches discrepancies in city-state-ZIP
code combinations) Time-in-Transit, (Provides the buyer with the
time-in-transit in business days for UPS ground shipments between any 2
postal codes), Service Mapping (generates a color-coded map displaying UPS
ground transit time for any origin ZIP code within the continental U.S.),
Electronic Manifesting (enables customers who use a non-UPS OnLine
compatible shipping system to upload shipment manifest information to the
UPS mainframe). http://www.ups.com
- Not To Be Out Outdone ........... as APL has announced
the introduction of its "HomePort", claimed as the industry's 1st
customizable web page that enables customers to oversee the information
& transactions critical to container management & logistics.
HomePort allows customers to tailor the content & layout of their page
to satisfy their specific business objectives, as well as their own personal
preferences. The site also logistics management by centralizing the
resources integral to tracking and managing container distribution --
shipment summaries, bookings, bills of lading, schedules & vessel
- Project Bolero Nears .......... as the e-commerce system,
which eliminates the use of paper documentation in Int'l shipping, is being
tested in Singapore, with Evergreen, Maersk, NYK, MOL, K-Line & APL
taking part in the project. Bolero will be launched in 16 countries,
including Japan, Taiwan & China, in July. Electronically linking the
different parties in the transport chain, Bolero provides a secure means of
transferring documents such as bills of lading & letters of credit.
Meanwhile, other shipping companies have voiced concern over the
implementation of Bolero on the issue of electronic Bills of Lading (B/L)
service. While the provision of electronic B/Ls would be an advantage to
carriers, not all shippers have the required EDI functions. Even if Bolero,
as a trade financing EDI scheme, were implemented on a commercial basis,
lines would still need to issue manual B/Ls to shippers without EDI. In
addition, Bolero's policy of ensuring the safety of electronic transmissions
is sparking anxiety throughout the shipping community. Bolero Operations
believes the manner of message should be chosen by those concerned, but some
carriers are complaining that the actual enforcement of Bolero will require
a different message format for every shipper. This has prompted the majority
of EDI users to hope for a generalized format to avoid chaos. Bolero
Operations, in turn, is currently reported to be studying the possibility of
a standardized message format. The Bolero final launch program will be
tested by a selected team of users from 13 countries - Belgium, Brazil,
France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain, Taiwan,
the UK, and the U.S. Please note that electronic B/ls will not be legal
until the U.S. COGSA 1998 passes Congress. Learn the details of Project
Bolero at our Electronic
Commerce - The Cargo Letter
- KLM's E-Commerce Blooming ............ as the Netherlands
carrier is partnering with Pandesic to create NewFlowers.com, to facilitate
the trade of fresh-cut flowers directly from Int'l growers to U.S. florists.
KLM has been shipping fresh flowers from international distributors to U.S.
markets for years, when the reach and accessibility of the Internet created
the opportunity for KLM to become a distributor as well as the carrier. The
back-end solution provided by Pandesic has increased the efficiency of the
delivery process, cutting the average delivery time from grower to florist
from 5 days down to 48 hours. Given this inventive logic of "if we fly
it, let's sell it too", KLM's goal is to double online revenue by 2001.
Pandesic LLC is the Internet company from Intel & SAP. http://www.NewFlowers.com/
- The Melissa Computer Virus ............ as our industry
was hit hard this month, get a full explanation & fix at the top of our
front page: http://www.cargolaw.com
- A Smart Move ............... as the Int'l Standards
Organization (ISO) will meet shortly to decide on whether to adopt a
proposed 13.56 megahertz standard for "smart" labels, as suggested
by Philips & Texas Instruments, vendors of the radio-frequency
identification (RFID) technology. Smart labels are fitted with RFID
transponders which are small enough to be laminated between paper or plastic
layers, with the ability to store 256 bits of data for distribution-related
applications, such as the identification of shipments or packages. Need for
a single Int'l standard being obvious, the smart-label market could reach
one billion units within the coming 4 years.
- A Taxing Problem .............. as the Information
Technology Assn. of America (ITAA) has blasted a bill passed by the North
Dakota Legislature, saying it may violate the U.S. Congressional moratorium
on Internet taxation which was instituted by the U.S. Internet Tax Freedom
Act of 1998. The bill, HB1108, carries amendments that would redefine
Internet Access Providers (IAPs) as telecommunications service providers,
and therefore make them subject to the state's Telecommunications Gross
Receipts Tax. The North Dakota bill would tax Internet access providers by
2.5% on adjusted gross receipts of carriers. Efforts will continue by tax
authorities to see that we all pay for conducting web commerce. Stay tuned.
- Roadway Concerned For Mexico Security ............. as it
has announced new "Border Ambassador Service" for motor freight
shipments to & from Mexico that promises "fast, secure
&reliable" cross-border moves. Located at the U.S./Mexico border,
Roadway's Border Ambassadors will provide customers a single point of
contact for rate quotes, service coverage & standards, document
requirements. Border Ambassadors will act on behalf of customers' interests
in moving freight door-to-door in & out of Mexico. Roadway's Border
Ambassadors are bilingual personnel, who will expedite the Int'l shipments
through U.S. & Mexican Customs. Once a shipment crosses the border, into
the danger zone, the Border Ambassadors will track it to its destination.
However, Roadway promises a dedicated linehaul fleet, utilizing satellite
tracking during transit within Mexico, a move that should help. Armed
escorts might be better.
- EU Becomes Consolidated ......... as California trucker
Consolidated Freightways (CF) has opened a European division, based in
Zurich. The new division is to offer ocean, ground, expedited LTL & air
- One Way Trucks Up ......... as Budget Rent a Car has
raise its one-way truck rental rates by 9% on average in all locations,
following a similar move by Ryder TRS, Inc.
- NIT Picking .......... as the proposed merger between
Canadian Railroads & Illinois Central Railroads is now supported by the
National Industrial Transportation League after it had initially expressed
concern over the possibility of reducing competition. NIT's support will now
come before the U.S. Surface Transportation Board's scheduled oral arguments
on the transaction.
- U.S. Intermodal Rail Volume Up ............... as
intermodal trailers & containers moving by rail jumped 2.6% in the first
seven weeks of this year, according to comparison figures over last year
released by the Assn. of American Railroads. Rail carload traffic, which
does not include intermodal, dropped 1.5% over the same comparison period to
the weak steel sector. RailTex, the largest operator of U.S. short line
railroads announced that carloadings for February 1999 increased by 25% to
50,957 from 40,845 in February 1998. The Company experienced traffic gains
primarily in railroad equipment, farm products, nonmetallic ores, autos,
chemicals & paper.
- New Lawsuit Says The War Is Not Over .......... as on
March 31, 1999, in the U.S. District Court for the Northern District of
California, a class action complaint was filed on behalf of U.S. veterans of
World War II, against Japanese companies who used U.S. prisoners as forced
laborers during the war, including Nippon Sharyo, Ltd.; Mitsubishi Corp.;
Showa Denko, Ltd.; Sumitomo Corp.; Yodogawa Steel Works, Ltd.; Nippon Steel
Corp.; & Mitsui Co., Ltd. The complaint seeks money damages on behalf of
former U.S. prisoners, who were forced to labor for Japanese industry during
World War II, in violation of Int'l law & under inhumane conditions. The
complaint asserts claims for violations of Int'l law, for unjust enrichment,
& for unlawful, unfair, and fraudulent business practices. Plaintiff
Ralph Levenberg of Reno, Nev., is a retired U.S. Air Force major. As an Army
Air Corps Sgt. at the time, Levenberg was a member of U.S. & Filipino
forces on Bataan resisting the Japanese invasion of the Philippines.
Outnumbered, outgunned & starving, Sgt. Levenberg & the other
defenders of Bataan were ordered by their superiors to surrender on April 9,
1942. Sgt. Levenberg then survived the infamous "Bataan Death
March," in which thousands of the prisoners died during a 6 day forced
march at the hands of the Imperial Japanese Army. Sgt. Levenberg & other
prisoners were later shipped to Japan (while in the cargo hold of a
freighter with neither ventilation nor sanitation), and confined at a prison
camp near the city of Nagoya. There, the prisoners were hired out as a slave
labor force to Nippon Sharyo, a railroad equipment manufacturer. Like many
other Japanese companies that used American slave labor during World War II,
Nippon Sharyo does business in the U.S. today. Sgt. Levenberg was forced to
perform hard labor 7 days a week on a starvation diet. While performing
coerced labor for Nippon Sharyo, he suffered permanent injuries from
clubings by company guards. When he was liberated by U.S. forces in August
1945, Sgt. Levenberg weighed 70 pounds & was near death. The Cargo
Letter stands behind the honor & suffering of Sgt. Levenberg and his
brave fellow American, British & Dutch defenders who fought the
incredible Japanese injustice. Our memory is also quite long, very patriotic
and the Editor of this publication has a long time family friend who just
survived the very real Bataan Death March. Indeed, it was more lethal to be
captured by this enemy than fight them. What happened as the result of
Bataan is a true crime of historic proportion. Still, we feel that efforts
are better put to education ...... not lawsuits at this 57 years later
stage. This is not an issue which should be debased & degraded by the
acts of a "class action lawyer" who wants to earn "shake
down" fees from companies who have no memory of the W.W.II events. In a
class action, it is the law firm which makes the main financial recovery.
More than 5,700 Japanese were tried for war crimes in 1946. This case can
add nothing. No, this is not an appropriate action. To supply money to
lawyers who were likely not even alive at the time of Bataan does no honor
to those who gave so much to restore freedom in the Pacific.
- Canadian Airlines. DOWN with a 4th-quarter loss of
C$149.7M and losses for the year of US$92.2M.
- Cathay Pacific Air. DOWN with a US$70.38M loss for 1998.
Net profit for 1997 stood at US$220M. Cargo operations also fared badly with
volumes falling 9.5% to just under US$1B. Cathay management believe the
disruption which occurred during the opening of the new Hong Kong Airport at
Chek Lap Kok lost the airline between US$46-50M in revenue.
- COSCO. UP with a net profit rise of 5.3% to US$129.29M
- DFDS (Danish forwarder). UP as net profit grew by nearly
40% to US$43M.
- Eurotunnel. UP as revenue for 1998 was (pound)666M, an
increase of 26% at constant exchange rates compared with 1997. This figure
includes turnover of (pound)618M (up 36% on 1997) and other income including
business interruption insurance payments, as in 1997. The cross-Channel
freight market remains highly competitive. Eurotunnel's freight shuttle
service had a market share of 37% in 1998.
- Forward Air. UP, as it expects to report record 1st
quarter earnings that will significantly exceed current analyst estimates.
Preliminary results indicate that sales for the 1st quarter were
approximately US$37M compared to US$28.9M in 1st quarter 1998.
- Hanjin Shipping. UP as revenue rose 4.3 percent last
year, to US$2.94B. During 1998, Hanjin carried 1,828,000 TEUs and 6.2
million tons of bulk cargo.
- Korean Airlines. UP, posting a US$246M net profit for
1998 compared with a loss of nearly US$300M the previous year. A major
factor in the turnaround was cargo revenue, which rose by 35%.
- MSAS. UP with a revenue increase of US$830, up 17.9%, in
its global logistics, forwarding & customs brokerage units for 1998.
Operating profits increased 32.2% for MSAS Global Logistics while the Int'l
Logistics Management group saw operating profit rise 18.7%.
- P&O Nedlloyd. UP operating profit of US$55M for the
final quarter of 1998 while for the year, revenue rose 5% to US$882M as
volume increased 10% to 658,400 TEUs. Average revenue per TEU was down 4% to
US$1,339, and volume increased to 2.49 million TEUs in 1998 compared to 2.32
million the previous year.
- Transportacion Maritima Mexicana (TMM). UP with reported
US$1M 4th-quarter net income, compared with a year-earlier loss of US$10M,
despite lower profit from liner shipping. TMM gross profit on liner shipping
fell to US$35M, from US$50M in the year-earlier quarter. Operating income
for the TMM group dropped to US$15M from US$19M in 4th quarter 1997. The
company said its overall profit for the quarter resulted from US$11M in
profit, before financial expense, on the company's interest in TFM, a rail
joint venture. TMM has halved the number of staffers at its Mexico City
headquarters as part of a reorganization of the carrier and has transferred
its liner shipping operations to the new Americana Ships joint venture with
CP Ships. Many of TMM's top liner executives are transferring to Tampa,
where Americana will be based.
- Tough Sledding In China Skies ............... as measures
to cut excess capacity, including readjusting air routes & decreasing
flights, helped China's aviation sector walk away from massive losses last
year. But the industry is said to face another tough year with fierce
competition on the horizon. China's Civil Aviation Administration says the
domestic market in China may stagnate due to financial difficulties,
structural reform & budget cuts among government departments.
Competition is also likely from China's road, rail & other transport
networks which last year experienced average growth of 5.8% compared with
1.7% in the aviation industry. Airlines had showed massive losses in the
early part of 1998, prompting a special economic team to be formed in May.
Losses decreased steadily after May with China's airlines at last breaking
even in August. The future is less than bright with the State Development
Planning Commission & the CAAC issuing a circular aimed at stopping a
price war by banning discounts for domestic air tickets. Since 1 February
1999, only children, group travelers, teachers, students & disabled
military personnel have been allowed to buy domestic discounted air tickets.
China’s Civil Aviation General Administration (CAGA) is considering
cutting back on the number of domestic flights and fare wars in an attempt
to restore health to its battered aviation industry.
- EU Growth Slows .............. as London, Brussels and
Milan are the only European passenger hubs to show year-on-year cargo growth
over the past 2 years. Growth is slowing in many cases, notably at Heathrow
which saw a 1997 growth figure of 10.5% drop to 3.4% last year.
- Integration Continues ............. as Singapore Air,
Lufthansa & SAS have signed a Memorandum of Understanding (MOU) for
closer cooperation in the air cargo business. The MOU provides for a
feasibility study on various integration models among the companies in the
airfreight market. The study, which is to be completed within a year, will
scrutinize the prospects for wide-ranging matching of network management,
marketing and sales, product harmonization, and a common infrastructure for
information technology. It will also look at the type of organizational
structure best suited to implement these extensive integration plans. The
signing of the MOU enhances ties between carriers that already command a
major position in the world airfreight market. According to IATA statistics
for international air cargo traffic in 1997, the combined international
market share for all 3 airlines was more than 13% of the market.
- Uncle Sam's Post Makes Its Move ............. as there is
now an alliance between parcels DHL and the U.S. Postal Service which will
guarantee 2 day delivery of documents from the U.S. to Europe. The
"Priority Mail Global Guarantee" begins this month from 11 US
cities. The partnership is seen as an advance to the U.S. Postal Service's
Int'l expansion plans since it provides a working relationship with a global
group. Unlike European companies such as TNT Post Group & Deutsche Post,
the U.S. Postal Service is restricted from investing in Int'l delivery
- Libya Back In The Biz ........... as the hand-over by
Libya of the two suspects in the bombing of Pan Am 103 over Lockerbie in
December 1988 has led the U.N. Security Council to suspend sanctions against
Libya, paving the way for resumption of Int'l flights to and from the
country. Several airlines have already announced flights to Tripoli &
other Libyan cities for the coming weeks while Libyan Arab Airlines is
preparing its fleet for international service. Libyan Arab Air & Air
Malta conducted symbolic flights to each other’s country and back on April
6 to celebrate the end of the U.N. sanction.
- IATA Hard On Our PAL ............ as the rehabilitation plan submitted by
Philippine Airlines (PAL) is in jeopardy after creditor IATA said it won't
accept it. Acting on order from the Philippine’s Securities &Exchange
Commission, PAL drew up a rehabilitation plan to outline how it would
finance its operations and repay its many debts. The largest creditor banks
and 3 aircraft leasing companies agreed to accept the plan, but the Int'l
Air Transport Association (IATA) has rejected it. IATA is owed only US$32M
compared to the more than US$200M PAL owes to others who have approved the
rehabilitation plan, but IATA’s rejection is probably fatal to the plan.
The IATA suspended PAL’s membership in Sept. 1998, which prevented PAL
from benefiting from the IATA’s clearinghouse, because of the carrier’s
mounting debt. PAL wants to be readmitted immediately while paying its debt
over a 12 month period at reduced interest rate, but the IATA says its rules
require that PAL pay its debt with full interest & fees and that it make
a deposit to secure future obligations before it can be readmitted.
- Two New Stars .......... as Ansett & Air New Zealand, have joined the
Star Alliance. Alliance members, who include Air Canada, Lufthansa, SAS,
Thai Airways & Singapore Air, are set to concentrate on cargo-sharing
developments after initially being focussed on passenger traffic. Ansett is
also in the news as it may be acquired by Singapore Air. On a buying binge,
Singapore Air has been looking to acquire interests in Thai Airways &
South African Air, adding to its small stakes in Delta & Swissair.
However, late word is that Singapore Air now may believe that acquisition of
Ansett might not be as smooth as expected. Thus, contrary to insiders’
expectations, Air New Zealand, which owns 50% of Ansett, is now seriously
considering whether to use its preemptive right to buy the 50% share of
Ansett that it doesn't own.
- More Israel Competition ........... as Israel's attorney general has ruled
in favor of a Transport Ministry proposal to allow domestic carriers such as
Arkia to operate international passenger flights, effectively ending the
monopoly of El Al.
- Less Gabon Competition .......... as world leader Air Gabon is collapsing
under the weight of its debts and its managing director has appealed to the
government for state aid. The carrier’s debt is estimated at US$59M. The
50% devaluation of the pan-African CFA franc in Jan. 1994 nearly doubled the
carrier’s debt in foreign currencies.
- Tokyo - Singapore Capacity Up ............. as a cargo capacity-sharing
agreement between Japan Airlines & Singapore Airlines could see the
number of weekly flights triple. JAL is seeking government approval for the
move to increase freighter flights from 1 to 3 for the service which the
airlines jointly provide between Tokyo & Singapore. Both airlines began
selling space on a B-747F in November.
- ATA Increases Amber Stake ........... as Amtran Inc., parent company of
American Trans Air, Inc. (ATA), has announced that, in a cash purchase, it
acquired T.G. Shown Associates Incorporated, who owned 50% of Amber Air
Freight, the partnership responsible for marketing ATA's belly cargo &
mail capacity. For the past 7 years, Amtran has owned the other 50% of Amber
in partnership with T.G. Shown Associates, who managed the business.
- Kitty Hawk Gets Rest of AIC ........... as it has reached a settlement
with Pacific Aviation Logistics, Inc. (PAL), whereby Kitty Hawk has acquired
PAL's 40% interest in American International Cargo (AIC), the general
partnership in which Kitty Hawk held a 60% interest. American Int'l Cargo
provides scheduled airfreight service between Los Angeles & Honolulu,
among the Hawaiian Islands, and weekly through Melbourne, Hong Kong and
other Pacific Rim locations. AIC's 1998 revenues were approximately US$63M,
and its pretax profits approximately US$7.5M.
- Everyone Knows The Kiwi Can't Fly ............. as the FAA has grounded
U.S. low cost carrier Kiwi Int'l Airlines on 24 March, one day after the
airline filed for bankruptcy & received financial assistance from Pan
Am. The FAA said Kiwi's infrastructure had deteriorated to the point where,
without constant monitoring from the agency, it is no longer able to fly
- Panalpina Good To Go South .............. as it has just opened a new
300,000 sq. ft. megahub & Latin America gateway at Miami Int'l,
incorporating an air & ocean bonded warehouse & cold storage rooms
for heat-sensitive goods. With docks for up to 50 trucks, the site was also
selected for the test phase of a new transit software system which receives
information on individual shipments via Electronic Data Interchange (EDI)
directly from databases at Panalpina branches. All freight movements in
transit can be recorded using simple scanning procedures and then tracked
throughout the forwarding process, down to package level, until delivery. To
learn more about advances in electronic commerce, visit our Internet
& Electronic_Commerce Center
- Malaysian Air Reconsiders The Bug ............ as it may not fly to
certain destinations on January 1, 2000. The Kuala Lumpur-based carrier will
make a final decision on routes by June 30 after software has been put in
place to challenge the possible threat of the Y2K millennium bug. MAS has
committed more than US$22M to ensure safety by making it computers recognize
the arrival of the year 2000.
- Qantas Also Buggy ............ as it has announced a possible need to
curtail its service after December 31, 1999, due to safety concerns related
to the millennium bug. In a Y2K filing with the Australian Stock Exchange
this month, Qantas announced it is “difficult to obtain accurate and
detailed information from many critical service providers” and that “some
contingency plans may involve reduced frequency of flights on some domestic
& Int'l routes during the contingency period.”
- So Far, So Good ........ as FAA's real time testing of Denver Int'l air
traffic control computers yesterday, 11 April, was a success. They're Y2K
- Cause of Taiwan Crash Announced ............ as an official investigation
says pilot error caused a China Airlines crash at TPE that killed 196 people
aboard & 6 on the ground in 1998, according to the Taiwanese press. The
pilot is said to have approached the runway at too high an altitude
&failed to descend despite being reminded to do so by the control tower,
the United Evening News newspaper reported. In attempting to come around for
a 2nd approach, the pilot pulled the plane up too hard, stalling the plane's
engines and causing it to crash into houses next to the runway at Taipei's
Int'l. The Airbus A300-600R was en route from the Indonesian island of Bali
when it went down on Feb.16, 1998.
- The Supersonic Concorde Grows Up ........... as this technological wonder,
built at the same time as the now-obsolete Boeing 707, has now been flying
for 30 years. The 1st Concorde rolled out in December 1967, and it took its
maiden flight on March 2, 1969, following exhaustive tests of its powerful
Olympus engines. In 1973, the year deliveries were to begin, 16 airlines had
expressed interest for only 74 aircraft, well short of the 300 necessary
just to break even on production costs. However, 1973 was also the year of
the great oil crisis and, one by one, the Concorde’s customers realized
the kerosene guzzling aircraft no longer made economic sense. Eventually,
only 20 aircraft were built and development costs were entirely written off
by the British & French governments. After trying several routes,
including London - Washington & Paris - Caracas, Concorde now fly on
scheduled services between New York & Paris and London only, with the
exception of a few wintertime "snow bird" flights linking London
& Barbados. British Airways has so many requests for Concorde charter
flights from North America that it bases one of the seven aircraft it owns
in New York. Both airlines’ Concorde fleet is already fully booked for
December 31, 1999 ......... and those brave "Y2K Travelers". Like
British Airways, Air France also received 7 Concorde from the factory, but
removed 1 from service and use it as a source of spare parts for the
remaining six. Of the other 6 aircraft built, they were either donated to
aviation museums or destroyed. The exiting Concorde fleet may fly another 15
years without much more than regular maintenance visits, but Air France
hopes to be able to keep its 6 aircraft in service until 2030 after a very
heavy program of upgrading. Air France’s efforts to keep its aircraft in
the air for 54 years are due to the lack of a successor to the Concorde.
Still, this will not be a record, as the U.S. Air Force plans to keep it's
1950s B-52 heavy bomber in service until just about the same time the
Concorde will retire .......... making it over 70 years old at the time!
- Watch You Security! ........... as the U.S. FAA plans to scrutinize access
to secured areas at major airports after auditors in a survey of 5 airports
found inadequate safeguards for keeping out unauthorized personnel. Over the
next 4 weeks, FAA officials will look into compliance by the nation's 78
largest commercial airports and their airlines for controlling secured
areas. FAA will then decide if it needs to do ``red team testing'', such as
sending undercover agents to try to penetrate security, to ensure that
lapses have been addressed. Once the larger airports are checked, officials
will then look at smaller commercial airports. Testifying before the House
Appropriations Committee's panel on transportation and related agencies, the
FAA auditors reported they were able to bypass secured areas and even board
- Air China Announces Map Purchase ............ as the pilot of Korean Air
Flight 36, bound for Seoul, veered sharply on an O'Hare Int'l Airport runway
to miss an Air China B747-F freighter by less than 100 feet on 1 April. FAA
investigators have been trying to find out why the cargo plane pilot had
turned his aircraft back onto the runway moments after landing. ``The Air
China pilot didn't seem to know where he was going,'' an FAA spokesman said.
- The Eagle Has Awarded ............... as Hong Kong forwarder Air Eagle
Int'l has been awarded a Certificate of Merit in this year's Small &
Medium Enterprise Award contest in which Hong Kong General Chamber of
Commerce, recognizes business achievement in every sector of the community
and identifies success models in growth & competitiveness.
- Atlas Air Tops At MIA ........... as a report just released by Miami Int'l
Airport says Atlas handled more cargo at MIA in 1998 than any other airline,
up by 30.8% from 1997, to 208,096 metric tons, a 12.2% share of the
airport's total. The 2nd largest carrier of cargo in 1998 was American
Airlines, which saw its volume decline slightly to 165,650 metric tons in
- Formation of A Problem ........... as the FAA has proposed a US$33,000
fine against Northwest Air for allowing a formation flight between one of
its aircraft and a W.W.II, B-24 bomber. The incident occurred in July 1998
and involved a Boeing 747 carrying 373 passengers. The formation flight was
a tribute honoring a Northwest pilot about to retire. The FAA has also
proposed a US$1,000 penalty against the Northwest dispatcher who organized
the event and a 90-day flying suspension for the pilots of both aircraft
involved. Under aviation regulations aircraft carrying passengers are
prohibited from flying in formation.
- Kitty Hawk Off Its Diet .......... as the FAA has approved Kitty Hawk's
floor modification kit for PEMCO & AEI converted B727-200 aircraft. This
kit terminates the FAA's Airworthiness Directive (AD) relating to cargo
floor strength on converted 727-200 aircraft, and upgrades the average
weight to 6,000 pounds per cargo position. Kitty Hawk already has received
approval for the upgrade on B727-200 aircraft converted using the Kitty Hawk
conversion method, making its modification the only FAA-approved solution
available to operators of approximately 120 non-FedEx B727-200 cargo
aircraft that were converted from passenger to freight.
- "FedExville" Remains #1 ............. as Memphis, TN, remained
the world's top cargo airport, recording nearly 2.4 million tons of freight
processed, an increase of 6.1% over 1997. Los Angeles was 2nd place with
just over 1.8 million tons. Memphis’ top ranking in the cargo tables is
due almost exclusively to FedEx’s home hub being located there.
- San Diego Get New Cargo Home .......... as the City of San Diego has
placed its full commitment behind the San Diego Air Commerce Center at Brown
Field (SANDACC) through the signing of an amended Memorandum of
Understanding. The City's action provides the project team, Brown Field
Aviation Park (BFAP), and its financing partners with the assurances needed
to create an Int'l air cargo transport center at Brown Field.
- It's IACAC Time .......... as the April luncheon of the Int'l Air Cargo
Assn. of Chicago will be on Tuesday, April 13, 1999, at Giorgio's Restaurant
in Wood Dale. The speakers are Christopher Arens of Fountainhead Int'l &
Mr. Ron Hankins of JAL on the topic of "The Internet & the
I.A.C.A.C." Please RSVP by calling today: 708-643-8938.
- A MD-10F ........... as Boeing Company rolled out the first MD-10
freighter during ceremonies held at the company's Long Beach facility on 19
March. FedEx is the launch customer for the MD-10 conversion program.
Testing will take several months before the freighter enters service with a
two man crew.
- Volumes ............ as cargo volume dropped by 9% for Hong Kong in Nov.
1998 compared with the previous year. November 1998 declines of 3.5% were
recorded at Tokyo, 9% at Seoul, 0.5% at Singapore and 8% at Bangkok.
November 1998 volume rose 15% overall in Latin America & the Caribbean
but dropped 2% overall in Asia during the period. Northwest Feb. 1999
traffic in cargo ton miles (CTM) system wide were up 2.6% from 1998's 152.0
million CTM to 156.0 million CTM in February 1999. Also for Feb. '99, KLM
posted a 13% Far East cargo growth applied to both outward & homebound
flights. For March, KLM increased by 4% compared to March 1998, whereas
capacity increased by 5%, but the cargo load factor decreased from 72.9% to
72.1%. As for predictions, some experts believe that more than 250,000 tons
of global goods will move by air this year, an increase of 11.5% over 1998.
That figure would translate to a US$57B rise in the value of goods being
air-shipped, although the rise will still mean that only 0.59% of the
world's Int'll volume will go by air in 1999.
- M/V New Carissa - A Vessel That Would Not Die!
........... as it was a tragic month for the storm grounded the wood chip
carrier on 11 Feb. 19-99, along the Oregon Coast. The vessel grounded, was
set afire and then blown up in an effort to burn off her bunker oil. New
Carissa broke in two and was towed to sea, only to reground herself again
seventy miles away. Towed back to sea, the embattled ship was finally set
upon by U.S. Navy gun crews and torpedoed by the submarine U.S.S. Bremerton
on 11 March! The Cargo Letter has assembled dramatic photos & text which
tell the whole story of this "March Madness". Visit the site and
see M/V New Carissa under fire! New_Carissa_Ship
- Southern California Retains Top Spot ............. as the
Ports of Long Beach & Los Angeles handled a staggering 33% of all U.S.
containers last year - up 32% from the 1997 total, according to figures just
released. Long Beach was again the country's busiest container port, dealing
with more than 2.8 million loaded TEUs, a 6% increase over 1997. The tally
does not count empty containers & boxes of foreign origin. Other busy
ports were Los Angeles (2.3 million, up 10%); New York (1.9 million, up 8%);
Charleston (1 million, up 8%) and Seattle (975,500, up 2%).
- NVOCC License Time ........... as "Signals"
reminds that the new FMC regulations require every US based Non-Vessel
Operating Common Carrier (NVOCC) to obtain a license to operate as an Ocean
Transportation Intermediary (OTI). NVOCCs in the USA, including those also
licensed as ocean freight forwarders, must complete form FMC-18r and submit
it to the FMC with a license fee by May 1st. A 14 page license application
includes detailed questions about the applicant's qualifications, references
& ownership. Each application submitted by an incorporated NVOCC must
include a "Certificate of Good Standing" issued by its home state,
proof or registration of any trade name or d/b/a name used, a copy of its
tariff title page, and copy of its surety bond. And remember, as reported
earlier by The Cargo Letter, your bond rate has gone up:
OTI-Ocean Freight Forwarders in the USA, US$50,000 plus US$10,000 per
OTI-NVOCCs in the USA, US$75,000 plus US$10,000 per branch office
NVOCCs outside the USA, US$150,000 (no branch office bonding requirement)
For assistance with OTI licensing requirements & filing contact DPI,
or contact the FMC Bureau of Tariffs, Certification & Licensing, in
Washington, tel: 202-523-5796, fax: 202-523-5830.
- U.S. To Consider Carrier Antitrust ........... as
Congressman Henry Hyde, R-Ill., says he'll follow through on a pledge to
hold congressional hearings on antitrust immunity for ocean carriers. The
Ocean Shipping Reform Act, which takes effect May 1, permits carriers to
continue their decades-old practice of jointly setting rates. During
congressional debate last year, Hyde warned that the combination of
antitrust immunity and confidential shipper/carrier service contracts could
lead to abuse. Hyde said the House Judiciary Committee, which he chairs,
will examine the issue during the current Congress. In preparation for those
hearings, he asked the FMC for results of its recent investigation of
transpacific carriers. That FMC report claimed members of the Transpacific
Stabilization Agreement, a carrier group with antitrust immunity, forced
small shippers to pay premiums to obtain ship space. The abuses, laid out in
40,000 pages, show that carriers colluded in inflating prices and refused to
carry low-priced cargo. NVOCCs were paying rates up to US$300 over normal
prices yet preferred customers weren't being socked with the higher rates.
The FMC's bureau of enforcement is considering punitive action. John Moran,
an FMC commissioner, said that the enforcement actions now being considered
send a clear signal to carriers that "we are vigilant and watching
you." Moran was speaking at the Compliance & Ocean Transport
Deregulation conference organized by the Journal of Commerce. Moran declined
to elaborate on what specific action the FMC plans to take but acknowledged
he has concerns about discussion agreements. Carriers convinced Congress
that scrapping their antitrust immunity would negate some of the cost
savings that deregulation would bring, he explained. The FMC recently
decided to allow steamship lines to exchange sensitive market information
& to establish voluntary rate setting agreements.
- The APL View ......... as APL has issued a comprehensive
report on industry deregulation, which takes effect on May 1. http://www.apl.com
- Good Bye APL Stacktrain ........... as Neptune Orient
Lines entered into an agreement to sell its North American stacktrain
business unit, Land Transport Services Inc. (LTS), for US$315M to an
affiliate of Apollo Management, L.P., a New York-based investment firm.
Apollo, which recently announced an equity investment in California-based
Pacer International Inc., a North American intermodal service provider,
plans to operate the stacktrain business under its current name "Land
Transport Services,". The shares in LTS are currently held by APL, the
container shipping arm of NOL. The sale price is US$292.5M plus an
additional payment (earnout) up to US$15M if LTS achieves a specific
earnings target for financial year 1999. Additionally, APL will retain
US$7.5M in common stock of LTS. For NOL, the sale will generate a net profit
of about US$167M. The company will use the proceeds to reduce debt.
- P & O Wants You? ............. as the carrier is
looking for other lines to acquire, according to P&O Nedlloyd CEO Tim
Harris in an interview with Lloyd's List. Harris says that now the merger of
P&O Containers and Nedlloyd Lines has been concluded the time is right
to look for new purchases. Already the 3rd biggest container line in the
world, P&O Nedlloyd believes the optimal capacity of the line should be
around 5 million TEU a year, well above it's current 2.6 million TEU level.
In 1998 P&O Nedlloyd bought Australia's Blue Star Line with it's 200,000
TEU of traffic.
- Sea-Land To Split ........... as CSX Corporation, has
announced that Sea-Land Service Inc., its container-shipping subsidiary,
will be managed as 3 separate businesses starting in mid-1999. The units
will be global container shipping, Int'll terminal operations & domestic
trade. Each of the businesses will display financial results quarterly.
Headquarters will be in Charlotte, N.C., where Sea- Land is now based. It
has been known for several years that CSX would be willing sell Sea-Land at
the right price. The split up could be considered a prelude to disposal of
one or more of the new units, although perhaps not immediately.
- Goodbye Ivaran ............. as the Norwegian shipping
company Ivaran will be wholly integrated into operations of owner Lykes
Lines, whereby the name of Ivaran will be retired. This is a result of the
completion of the joint venture between the Canadian CP Ships & Mexico's
TMM Line under the name of American Ship, linking the activities of Lykes,
Ivaran, Conship & TMM.
- The Magnificent 7 Will Go Up ................ as COSCO,
Cho Yang Shipping, DSR-Senator, Evergreen Marine, Hanjin, Norasia & the
United Arab Shipping Co. will now boost rates in the wake of price hikes by
the Japan Europe Freight Conference (JEFC) and various other conferences.
JEFC members have increased rates by US$200 per 20-foot container &
US$400 per 40-foot container for cargo from Japan to Europe, thus
effectively restoring the rates to former levels. The independent carriers
supported the rate increase decision by arguing that there was a widening
price gap between Japan & other Asian markets which had to be addressed.
The Asia Westbound Rate Agreement (AWRA) & independent carriers
introduced the same rate rise as JEFC on Asia-Europe containers at the
beginning of the year.
- EU - So. Am. Up .......... as on May 1 the Europe East
Coast South America Conference is to raise its southbound rates by US$165
per TEU, an increase of 25% on its minimum price of US$650 per TEU.
- And Then There Were None ............ as the Transpacific
Westbound Rate Agreement (TWRA) looks set to cease, with all 6 members ready
to discontinue activities as a group on April 30. Earlier last month K-line,
Maersk, OOCL & Sea-Land Service Inc. announced their intention to leave
the agreement, which would have left only NYK Line & Mitsui OSK Lines as
members. Now, as predicted, these two have followed suit, spelling an end to
the arrangement. It is believed the lines are leaving the conference for
reasons which include the introduction of U.S. shipping deregulation on May
1 and the depressed state of the transpacific market. Nearly all of the
group's current contracts expire on April 30.
- Maersk Gets Top Asia Honors ........... as it has taken
the lion's share of prizes at the 13th Asian Freight Industry Awards (AFIA)
1999. For the 6th straight year, Maersk received the "Overall Best
Global Shipping Line" title and made it 12-in-a-row with the "Best
Shipping Line: Asia-Europe" award.
- East Coast Lightens Up ........... as carriers on
American East Coast routes will now be able to change their conference rates
at 24-hours notice, instead of 10 days, after a landmark agreement within
the newly formed East Coast of South America Association. Another relaxation
of rules sees members able to offer individual contracts to shippers without
the prior knowledge of the conference secretariat. The carriers, formerly
members of the Inter-American Freight Conference, have also agreed to
additional changes designed to allow them to form new alliances and reduce
overcapacity. Another change allows the 8 remaining members of the new
conference to form relationships with ship companies that left the IAFC in
1998, such as Sea-Land, Maersk, CSAV, Euroatlantic Container Line,
Transroll, Compagnie General Maritime & NPR/Navieras. The remaining
conference carriers Crowley, Ivaran, Iberia, Alicana, Columbus, Mexican
Line, APL & P&O Nedlloyd are hoping the new rules will create more
flexibility in the industry. Crowley's V.P. of East Coast of South America
service, Frank Larkin, say carriers feel that the changes will alter the
attitudes of shippers who, in the past, have viewed conferences as too
rigid, unresponsive & bureaucratic.
- Up The River Without A .......... as the U.S. Coast Guard
has banned 14 vessels from operating on the Mississippi River after finding
they are "impermissibly controlled" by non-U.S.interests. The
Jones Act requires vessels in U.S. domestic service to be at least 75% owned
by U.S. citizens. The Coast Guard says the 14 ships it cited are operated by
MV One LLP & are controlled by Consolidated Grain and Barge Co., a
Japanese-owned entity. The Coast Guard said Consolidated & its parent,
CGB Enterprises, are owned by Zen-Noh Grain Corp. and Itochu Corp., two
large Japanese trading companies. The vessels' owners plan to appeal the
Coast Guard ruling.
- 911 For Brazil Fleet ........... as shipping lines are
being urged by the country's government to join forces to merge for their
own survival. The chief of Brazil's Merchant Marine Department, Armando
Rodriguez, believes that the suffering lines must form a medium-sized
company to continue operations. Several Brazilian lines, including
Transroll, Frota, Amanica, Global, Alianca & Grupo Libra were in merger
discussions last year until Hamburg Sud acquired Alianca and the talks
stopped. Brazilian shipping was very strong in the past but that was in the
old closed conference system, as supported by subsidies.
- New Asia Freight Plan ........... as Osaka-based
consolidator, Naigai Trans Line, could become the 1st ever Japanese
consolidator to assure pre-agreed, pre-fixed volumes of freight to shipping
firms it utilizes on Japan-Asia routes through the introduction of a
so-called Asian rendering of the service contract. As the largest
consolidator on the trade, Naigai will run the operation on a 6 month trial
basis starting from this month. If the service turns out to be profitable,
it could be permanently adopted. The firm hopes the policy will reap rewards
for both itself & its lines, following Naigai's introduction of Japan's
first direct consolidation operation from Hanshin to Taichung in Taiwan last
month. This followed a direct consolidation service to Dubai from Osaka
& Kobe which was launched last June. Meanwhile, major manufacturers and
shippers have recently been attempting to forge increasingly tighter
relationships with the lines by utilizing their huge freight volumes as much
as possible on global trades. Naigai Trans predicts the freight assurance
will result in increased stability of bottoms capacity which will serve to
better operations for its clients. The company handles approximately 2,000
TEU of LCL freight each month on the Japan - Asia trade.
- The Poor State of Int'l Vessel Repair .............. as
in 1998 officials banned 152 vessels from sailing until defects were made
good after snap inspections. Overall, 1,286 foreign-flag vessels, or 16.1%
of all ships calling at Korean ports were inspected with deficiencies found
- Container Price War? .............. as container
manufacturers face a cutthroat future as world demand for containers
continues to drop. China's 41 container manufacturers cover more than 75% of
the world's total production, with peak capacity of 1.48 million TEUs every
year. Global total annual demand for TEUs, however, has shrunk to 1.2
million TEUs, leading to fierce competition & price undercutting. The
situation worsened last year as turmoil in the Asian economy drove down
world demand for containers. Now, approximately 40% of the total production
capacity of China's container manufacturing industry is lying idle.
Predictions by industry analysts point to the price war taking its toll with
overall profits cut by as much as US$15M.
- Ripping Off Reefers ............. as last year there were
about 40 refrigerated containers stolen at Hong Kong with a value of
approximately US$1M and all cases had similarities. They primarily involved
new shippers, who were placing their 1st order for several refrigerated
containers. The new shippers would usually operate out of very small
offices, or no office at all. The carrier or freight forwarder released the
containers to the shipper for stuffing, but the boxes just disappeared and
none have been recovered. The TT Club has issued advice to solve the chilly
crisis for members to undertake a series of measures. First, conduct a site
visit and / or a financial check on the new shipper and treat large bookings
for multiple refrigerated containers with suspicion. Release one
refrigerated container at a time. Require each new shipper to deposit a
Cashier's Order for the value of the container, which will be given back to
the shipper after the laden unit is returned.
- KLA Chair Steps Down ........... as the chairman of K
Line America, Oscar Abello, has taken early retirement and left his post on
April 1. Abello, 58, had served CEO of K Line America since is formation in
1990, becoming chairman last year. He was president of Kerr Steamship Co.,
which was K Line's US agent, prior to 1990.
- Aussie's Grab Your Wallets ............ as a new
"Guangdong Origin Receiving Charge" will be applicable on export
shipments from Guangdong to Australia. These charges are a partial recovery
of existing shore-side costs incurred by shipping lines in the province. For
vessel departures after April 15, 1999, the following levels will apply for
all Australia export shipments issued on a Guangdong Bill of Lading. For dry
cargo: US$141 / 20-foot, US$269 / 40-foot. For reefer cargo, US$183 /
20-foot, US$350 / 40-foot. The above charges shall be listed separately from
the ocean freight rates on all Bills of Lading, manifests & other
- Asia Loves Rotterdam .......... as for the 13th
successive time the readers of the journal Cargonews Asia have proclaimed
the Port of Rotterdam 'Best Port in Europe'.
- Johor State's New Port To Open ............ as the
project at Tanjung Pelepas has a Dec. 1999 deadline to begin commercial
operations. The 1st of 5 phases, with 6 berths & a handling capacity of
3.8 million TEU annually, is almost complete. The remaining 4 phases of the
project are expected to be operational by 2020.
- The Philippines Contribution ............ as some 50,000
officers & ratings were put on board foreign ships last year by the
Philippines top 10 manning agents. The total figure, 49,228 is a 7.6%
increase on the 1997 figure, but is only about 25% of the total Filipino
sailors deployed abroad. Foreign pay the this 25% of the Filipino sailor
force for totaled US$299M.
- Panama's Pride Continues Decline ........... as it's
Canal is being by-passed by more and more containerships which are too wide
to transit the channel. Clarkson, the UK shipbroker, has reported that the
world fleet of vessels too wide for the canal rose 49% between 1995
&1998. "Post-Panamx" is a term to describe ships larger than
the Panama Canal will allow to pass. There are currently 91 post-Panamax
containerships worldwide with a total capacity of 483,924 TEUs. A further 47
ships are on order, representing an additional capacity of 262,662 TEUs.
Post-Panamax ships have had the fastest growth in the containership sector
since 1990, according to Clarkson Containership Register 1999, with trading
areas being "steadily expanded".
- Fewer At HKG Registry ......... as the Hong Kong
Shipowners Assn. recorded a drop in the number of ships owned, managed &
operated by its members. Figures show that by December last year, its
members had 1,118 vessels, a drop of *% from 1,214 ships in 1997.
- Philadelphia Marine Day Symposium & Evemts .........
as the two day event will be held on May 20 & 21st a few short blocks
from Independence Hall& The Liberty Bell. In addition to a fine roster
of spekers, you'll enjoy whaleboats races, a parade, vessel toursand much
more! Sign up today and get more information from the Maritime Exchange:
- Interview With A Pirate .......... the elusive "mr.
Wong" of Indonisia. Modern pirates include some petty thieves who steal
goods worth a few hundreds U.S. dollars, but but its lucratove rewards have
also attracted well-organized crime syndicates whose working vessels are
equipped with satellite dishes, computers & automatic weapons. The
- Throughput ............ as containers carried by barges
passing the port of Antwerp rose by 8% to 11 million tons, the equivalent of
1.1 million TEU or 550,000 road vehicles, in 1998.
Here are our suggested world wide web sites of the week for your business,
your information and your amusement ...............
Y2K Compliance Database
Hertz Corp. ............ fully interactive website for it's
Truck & Van business. The site calculates the total cubic feet &
determines the truck size needed. Also included is the full range of
moving-related supplies & equipment available such as boxes, tape, rope,
furniture pads, and hand trucks. Users can search for specific rental locations
in their area &receive turn-by-turn directions to that location.
Yellow Freight .......... new site, services & a feature
to customize your own personal page and obtain "daily specials".
Women In Aviation
Norfolk Southern Corp. ...........1998 Annual Report.
Go-Global ........ has a new screen saver for you
BEA Weblogic ........... software tracking just adopted by
The Registry of Former Federal Investigators
.........including U.S. Customs
Toxic Chemicals On CD-Rom ..........SARA III fields
integrated with TSCA information; select U.S. Code Chapters; CORR with TSCA 4,
5, 6, 8, and 12b (export) cross-references; EPA PMN; Canadian DSL/NDSL; European
ELINCS; & Adobe, Acrobat (PDF) format for instant search/retrieval.
Emergency Equipment & Info
Fraud Report ....... how stop it, not do it.
Visions of LAX .......? We're not exactly sure what this,
but offer thanks from our home, LAX.
It's Tax Time ........ better consult the Freight
Detective's Financial Center
Financial Resources -
The Cargo Letter
-- by Warren S. Levine, for The Cargo Letter
SEATTLE (April 11) -- President Clinton and Chinese Premier Zhu Rongji met
last week in Washington, DC, to discuss trade issues. The talks were thought to
be an icebreaker for China's entry into the World Trade Organization.
But after days of negotiations and some concessions on the part of the
Chinese, Zhu will return to Beijing without the coveted brass ring of WTO
Far from sending Zhu home empty-handed, U.S. Treasury Secretary Robert Rubin
said, "...we've made a great deal of progress, and ... (Zhu) had a very
successful trip in moving this process forward a very long way."
During the meetings, China agreed to lift its ban on importations of
Northwest wheat, and lowered tariffs on thousands of American products. China
also pledged to lift its bans on US telecommunications companies, which will
improve communications within China and provide a huge market for American
companies at the same time.
Duties levied by China on consumer goods are prohibitive -- blue jeans, for
example, carry a 70% duty -- and most Chinese companies cannot afford to incur
such expenses. Similar high duties on durables have slowed the modernization of
China and made items which are considered necessities in the West inaccessible
to all but the wealthiest Chinese.
The easing of regulations on American telecommunications companies should
have a positive long-term effect on China's infrastructure, as only a reported
10 percent of Chinese households now have a telephone. This opens up a huge,
hungry market for companies such as Lucent Technologies (NYSE: LU), AT&T
(NYSE: T), and other companies which already have a joint-venture presence in
Although China made what Zhu called "very, very major concessions,"
President Clinton vetoed China's entry into the WTO. The bottom line for the
United States continues to be the reduction of the $57 billion trade deficit
Last Friday, Taiwan announced that it would rescind an import ban on Chinese
produce, but the ban on direct flights and sailings between Taiwan and the
mainland will continue to be in effect.
Taiwanese were incensed when Zhu, during his visit to the White House,
compared his position to that of President Lincoln, who fought and won a civil
war in the United States. The fact that Lincoln was fighting for freedom and
human rights escaped Zhu, who still presses for Taiwan's
"reunification" with the mainland. Taiwan officials restated their
position firmly that they "will never, ever accept the communist system of
government" of Beijing.
In addition to the meetings in Washington, Zhu, the first Chinese Premier to
visit the United States since the mid-1980s, stopped in Denver on Saturday,
where he addressed a group at a luncheon given by the mayor.
Twenty-three pro-Tibet protesters were arrested by Denver police, and Harry
Wu addressed the crowd: "The Chinese have come here with blood on their
In a somewhat unrelated story, Zhu Muzhi, a former Chinese Communist Party
official, told AP reporters in Beijing that China had a shortage of tear gas and
rubber bullets and were forced to use the only weapons they had -- guns with
live ammunition -- to repel protesting students in Tiananmen Square in 1989.
The tenth anniversary of the democracy uprising is June 4th, and protesters
are already massing to deluge China with petitions and information. A website
has been set up at www.june4.org.
Zhu is due to visit Los Angeles, Chicago, New York and Boston before
returning to Beijing.
Warren Levine - firstname.lastname@example.org
Warn v. M/Y Maridome
Nos. 97-55610, 97-56355
Decided March 3, 1999
Holding: The U.S. 9th Circuit Court of Appeal held the district court's
dismissal of Warn's Jones Act claims as proper in the face of relevant Lauritzen
factors pointing toward the application of foreign maritime law.
Facts: The luxury yacht M/V Maridome hit a metal pipe in a Greek harbor while
ferrying crew & passengers to shore. The accident resulted in multiple
injuries and deaths. When the Maridome was in U.S. port, the Warn's filed suit
for claims under the Jones Act, the Death on the High Seas Act, & general
U.S. maritime law. The 9th Circuit approached the dismissal of Warn's claims
using the analysis in Lauritzen v. Larsen, 345 U.S. 571 (1953).
They held the dismissal of the Jones Act claim as proper when considering the
Lauritzen factors. While the ship may have been managed from a U.S. base of
operations, the 9th Circuit found many other factors pointing to the application
of foreign law and held the dismissal of other claims for forum non conveniens
as appropriate given Warn's available remedies to two different foreign nations.
AFFIRMED. Read the entire opinion: http://laws.findlaw.com/9th/9755610.html
Business Wire - March 199 -- It's now less than 200 business days until your
company will be tested.
PRESIDENT CLINTON, FROM HIS STATE OF THE UNION ADDRESS:
"We...must be ready for the 21st century from its very first moment, by
solving the so-called Y2K computer problem... We need every state and local
government, every business, large and small, to work with us to make sure that
this Y2K computer bug will be remembered as the last headache of the 20th
century, not the first crisis of the 21st."
FROM THE REPORT OF THE SPECIAL Y2K COMMITTEE OF THE US SENATE:
"Despite its short tenure, the Committee has logged a staggering number
of hours addressing the Y2K issue...The Committee is among the most broad-based,
best-informed bodies in existence, yet it cannot predict what will occur on
January 1, 2000. The data simply does not exist... While the Committee is
growing more comfortable with the level of domestic preparedness, we have far
less confidence in the international arena..." (report released March 3)
CONCERN MOUNTS ON GLOBAL PREPAREDNESS
"... Many observers assume developing countries are less dependent on
computers in everyday national life. But the majority of developing countries,
even the poorest, have computerized essential services such as power generation,
telecommunications, food and fuel distribution, and the provision of medical
care. ...A general failure of such systems could endanger the health, security,
and economic well-being of people in the developing world." (World Bank
press release, Jan. 26) The World Bank conducted a survey on the Y2K
preparedness of 139 developing countries. It found that only 54 had initiated
national Y2K policies; only 21 were taking concrete remedial steps to safeguard
their computing systems; and 33 reported high-to-medium awareness of the problem
but were not currently taking action. The Bank warned that the mere existence of
a national Y2K action plan should not be taken to imply that countries would be
fully Y2K compliant by the end of 1999.
More Recent Y2K Developments
PC Buying Spree? During January's World Economic Forum in Davos, Switzerland,
Sun Microsystems CEO Scott McNealy warned there could be a boom in PC purchasing
in the latter half of 1999 as companies stockpile against a future shortage.
McNealy warned that computer components manufactured in Asia could suffer
serious disruptions because of Y2K. Sun & more than 40 other IT
manufacturers, including Cisco, Dell, Hewlett-Packard, IBM, Intel, &
Motorola, have banded together in a group called the High Tech Consortium-Year
2000 and Beyond to address Y2K issues and conduct tests of their supply chains.
Panic Now, Not later: Panic about the Y2K problem could be worse than the
problem itself as some warn that Y2K may cause bank runs, food & gasoline
hoarding, and social disruptions. Y2K expert Charles Halpern told the New York
Times that overreaction now may be preferable to overreaction later.
"There's sufficient information for people to say there's a substantial
risk of disruption. Overreaction now is so much preferable to overreaction in
November that it's a risk worth running. People who want to lay in supplies of
canned vegetables can do it now without disrupting anything." (New York
Times, Feb. 9, 1999).
Russia Ups Ante: Last August, Defense Minister Igor Sergeyev said the Y2K
problem would not affect Russia's Strategic Rocket Forces because "we use
special technologies." In December, Strategic Rocket Force Commander
Vladimir Yakovlev said fixing the millennium bug would cost his forces less than
US$500,000. By February, however, Russia's Y2K coordinator asked for Western
help and said Russia needs as much as US$3B for defense systems, nuclear power
plants and other networks. (Dallas Morning News, Feb. 15, 1999).
SEC Disclosures Lacking: "Many companies are still not complying"
with the Securities & Exchange Commission's Year 2000 disclosure
requirements, SEC Chief Accountant Lynn Turner said Feb. 16. Turner said more
than half the companies in an unspecified sample failed to disclose how much it
is costing them to get their computer systems ready for the millennial change,
while close to half didn't describe their contingency plans in case the systems
fail. The SEC is alerting investors to examine the Year 2000 disclosures of
companies that interest them. If he were the chief financial officer of a
corporation that wasn't adequately prepared and things went wrong after Jan. 1,
Turner said, "I'd be hung out there like a cold piece of meat in
storage." (Associated Press, Feb. 17, 1999)
Utilities, Airlines Increasingly Confident: U.S. electric utilities signaled
increased confidence that power will flow as the calendar rolls. The North
American Electric Reliability Council (NERC) released its fourth quarter 1998
status report, asserting "virtually all" electric power systems in
North America will be "Y2K" ready by June 30, 1999. Meanwhile,
commercial airlines in early February began taking reservations for dates beyond
January 1, 2000. Many airlines have announced that top executives will be flying
during the rollover to January 1, 2000 as a display of confidence in their Y2K
preparedness. (News reports).
WHY-2K Contingency Planning? (by Vincent Mullineaux, CEO, Millennia III)
After all the time & money organizations have spent to fix or replace
noncompliant systems, many senior managers can be forgiven for asking, "Why
do I need Y2K contingency plans?" Consider: Incomplete remediation and/or
testing: Neither automated nor manual analysis and repair of Y2K-affected
systems guarantees 100% success.
Moreover, Y2K remediation is only as good as the test scripts, plans and data
that actually exercise the multiple functions of an application. Undiscovered
errors or omissions in the testing plan may have catastrophic consequences.
Inadequate change management; deficient inventories: IT/IS assets are added,
changed, removed from the business environment on a constant and irregular
basis. This can result in the introduction of new Y2K error conditions. The most
dangerous situations are systems that are not part of the Y2K remediation
effort, or hardware/software that has been changed without the knowledge of the
Y2K conversion team. Incomplete infrastructure compliance: Suppliers of water,
electricity, telephone, building access, etc. may experience Y2K interruptions
that could disrupt your business. Noncompliant key suppliers: mission critical
business functions could be interrupted by failures at key suppliers, despite
your best efforts to survey them for Y2K compliance beforehand. Non-compliant
customers: inability to accept delivery of your products, nonpayment, returned
merchandise, loss of warehouse space, all could result in disruptions to your
business and/or cash flow.
Despite their own best Y2K compliance efforts, every organization must face
the reality that things will be missed and some mission critical systems and
suppliers will fail. An adequate contingency plan, properly communicated and
involving the entire organization, can mitigate disaster under these
circumstances. The plan should consider: What happens when a mission-critical
component is unavailable to support the business? What is the impact of these
failures on the business? How prepared are we to respond to component failures
that support mission critical activities? What can we do to prevent or mitigate
these disruptions? Who has to be involved in the restoration of the failed
business component? Who has to be informed of the problem when the lack of
business functionality affects individuals or organizations outside of the
company? What steps and processes must occur to maintain business as usual in
the event of a failure? Is the failed component repaired, replaced, worked
around, abandoned, etc? What and where are the resources to make the business
component operational? The greatest uncertainty is when and what will fail.
Contingency planning is not just an IT/IS requirement, but an issue for the
LOOKING AHEAD Securities Industry enters "Streetwide Testing" In
March, the Securities Industry (www.sia.com) enters a critical phase in its Y2K
compliance effort with a series of "streetwide" tests between the
systems of various exchanges, trading systems, clearing and settlement systems,
brokerage house systems and market data suppliers. The first test, a check of
the flow of market data information, occurred on February 27. Subsequent tests
are scheduled on several weekends in March, April and May. The tests are being
coordinated by the Securities Industry Association, which represents nearly 800
firms, including investment banks, broker-dealers and mutual fund companies
active in all markets and all phases of corporate and public finance.
What About The 9s? Reports have appeared in the media lately warning of
potential date-related problems on April 9, 1999 (the 99th day of 1999) and
again on September 9, 1999 (9-9-99). In certain programs, the "9999"
string is used as a termination or end of job command. While it is certainly
possible that these date-related events could result in some disruptions, the
greater danger is that the limited nature of any "9s" related events
could breed overconfidence or complacency in Y2K preparedness. "Compared to
Y2K, the '9s are a minimal risk," says Fred del Gaudio, President and Chief
Operating Officer of Millennia III. For more from this Business Wire series,
In March, 1899 the 1st wireless distress signal (help) was sent by Morse code
when the S.S. Mathews ran into the East Goodwin Lightship. All hands were
In Dec. 1905 the 1st use of a distress call by an American vessel was made by
the relief ship No. 58 on station at Nantucket shoals. The call was
"Nantucket Shoals Lightship in distress send aid from anywhere". The
light tender Azalea responded in a roaring gale. Both vessels were tossed about
like canoes during maneuvers to get a line to the sinking ship. The crew was
rescued, the lightship sinking 10 minutes later.
The need for an Int'l distress was 1st envisioned by the Italian delegates to
a conference held at Berlin in 1903. They suggested the letters
"SSSDDD" be the Morse request for "help", but the only
outcome was the protocol that " wireless telegraph stations must give
priority to calls for help".
In 1904 the Marconi Wireless Co. took it upon itself to fill the need for a
distress call, by instructing its operators to use the signal "CQD"
when any ship was in distress, with the approval of the vessel master.
"CQ" was adopted because British operators mostly came from the
railroads where they used "CQ" as the general Morse call. However,
they soon realized "CQ" did not express the urgency essential when
disaster strikes. The letter "D" was added perhaps to signify danger.
Even with "CQD", confusion continued because some countries insisted
on using their own signals.
It was not until 1908 that what we now refer to as "SOS" was used.
Still, the old "CQD" was not easily forgotten. Jack Phillips used both
"CQD" & "SOS" when the R.M.S. Titanic sank in 1912. The
1st American vessel to send an "SOS" was the passenger freighter S.S.
Arapahoe, Aug 11,1909, when her shaft snapped off in a gale near Cape Hatteras,
drifting helplessly toward Diamond Shoals. The S.S. Iroquois responded, taking
Arapahoe with 150 passengers in tow to safety.
By 1912, "SOS" had come into Int'l general use. Few realize that
the distress call is not in fact "SOS", but rather an unbroken series
of three dots three dashes three dots, without pause. The distress signal is
neither an abbreviation or contraction. It does not signify "SAVE OUR
SHIP', or 'SAVE OUR SOULS'. The signal SOS was made mandatory on May 25, 1912
after the Titanic sinking. Submitted by Maritime Mobile Amateur Radio Club which
you may visit through our marine reference center:
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