The Cargo Letter
THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
21 June 1999
Good Monday Morning & the first day of Summer 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 lots of PIRATE news in Part
2, some quite sad.
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 ....... the Message
Board or try our new News Server.
The Freight Detective ........ http://www.cargolaw.com/detective.html
Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel,
logistics/customs attorneys at LAX.
INDEX to The Cargo Letter:
OUR Top Story
1. History Made On The High Seas
* A Bridge Cam For The World
OUR "A" Section: Trade, Financial & Inland News
2. Freight Forwarder Trade Briefs
3. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
4. Freight Forwarder World Air Briefs
OUR "C" Section: FF World Ocean News
5. FF World Ocean Briefs
OUR "D" Section: FF in Cyberspace
6. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
7. New U.S. Transport Related Legal Cases
- A Bridge Cam For The World
-- by Michael S. McDaniel, Esq. for The Cargo Letter
LAX - 19 June -- Our office group gathers to watch as morning breaks over the
historic landscape of Venice, Italy. The great ship approaches a colorful port,
casts her lines and then discharges passengers to explore the ancient city. Last
week we glimpsed a U.S. Navy Iwo Jima Class assault ship passing our web camera
view, perhaps in support of the Kosovo operation. Our world has changed forever.
For the first time in history a live camera has been mounted on an earth based
conveyance which can be viewed from anywhere by anyone on demand, 24 hours a
There is now an Internet web cam which broadcasts live, from the bridge of a
major ocean vessel around the clock ..... M/V Grand Princess. We see what the
ship experiences as an alert bridge crew directs the camera ..... LIVE. This is
real life in real time.
The Internet opened a historic door through which we have been able to
"Go Live" during recent years in observing the daily affairs of ocean
& air ports around the world, and to the very edge of human activity at the
North Pole. Our TRANS-CAMS web site feature monitors this door for you every day
and has become a central feature on the Internet, now offering over 170 live
camera views. Visitors can see everything from a dispute at the Gibraltar -
Spain border crossings to multiple views of vessels at the Port of Hong Kong,
and the current maritime conditions at the North Pole. The experience provided
by our TRANS-CAMS is rich, but it has never before included live views from an
earth based conveyance while underway. The new "Bridge Cam" from M//V
Grand Princess of the Princess Line renews every 60 seconds on your screen.
At industry seminars around the world since 1994 The Cargo Letter and the Law
Offices of Countryman & McDaniel have predicted the day when an ocean
carrier would be the first to offer a live "Vessel Cam" or
"Bridge Cam". We felt the advertising opportunities to be self
evident, but this simple step has not yet be taken by a cargo carrier.
The M/V Grand Princess Bridge Cam is a first on many accounts and represents
an industry breakthrough. The benefits have a potential far beyond passenger
development, entertainment & ads. Web cams can also allows users to monitor
transport progress, current conditions & expected arrival times.
Confirmation of arrival is critical in the air mode, where truck dispatch &
prep to receive cargo is a money issue. The "air cam" says "a
thousand words" and avoids long phone calls to confirm that a certain
flight is on the ground. One cold store operation in Miami will soon allow its
customers to "see" their perishable cargo, with header info showing
all important time & temp information. Indeed, this is a trend which has now
been pushed forward.
For the sheer adventure and beauty offered, we tune in to M/V Grand Princess
several time a day. Often "at sea", the view is only of the main deck
hot tub, but many times each day we are treated to a vessel encounter at sea, a
port arrival & docking or some weather situation which makes that visit to
the site a memory not soon to be forgotten. Even as this article is being
written, we are studying an ancient castle on an island off Spain as M/V Grand
Princess glides by! Keep looking!
We invite Sea-Land, APL, COSCO, Maersk, NYK, OOCL, and the rest, especially P
& O Nedlloyd (owner of Princess Line) to understand that a very small
investment (under US$1,000 on an existing satellite link) will bring hundreds of
thousands of customers to their web sites, over and over again, each day to
monitor vessel progress, thrill to the scenes of far away ports, learn about
company services and develop brand loyalty. Once a custodial cargo carrier makes
the move, most all will follow. We are entering a new era of "cargo
tracking" and a time when shippers are well supported to ask why they are
currently unable to view the state of the ship laden with their expensive goods.
The current Eastbound rotation for M/V Grand Princess is below and includes
such ports as Istanbul, Venice, Monte Carlo, Athens, Naples, Florence &
Barcelona. The schedule reverses every 14 days. The ports calls & times are
available at the Princess Lines web site, below. Join the adventure! Get the
direct web address below.
Cruise Itinerary M/V Grand Princess (all times local)
Day Port Arrival Departure
1 Istanbul, Turkey Embark PM Overnight onboard vessel
2 Istanbul, Turkey 2:00p
3 Ephesus (Kusadasi), Turkey 8:00a 6:00p
4 Athens, Greece 7:00a 6:00p
5 At Sea
6 Venice, Italy 12:00 noon Overnight onboard vessel
7 Venice, Italy 2:00p
8 At Sea
9 Capri/Naples, Italy 7:00a 6:00p
10 Florence/Pisa (Livorno), Italy 8:00a 8:00p
11 Monte Carlo, Monaco 7:00a 7:00p
12 Barcelona, Spain 12:00 noon Overnight onboard vessel
13 Barcelona, Spain Disembark AM
You may begin your adventure at our TRANS-CAMS
feature web site.
- It's Responsiveness, Not Price ........... as a U.S.
study conducted by Atlantic Mutual Companies, in a sample of 1,000, said
that 70.1% of traffic managers listed responsiveness as a reason to do"
business with a particular carrier. Service ranks well above price, which
was cited by only 46.8% of traffic managers. Best performance was the 2nd
most important criterion, being mentioned by 68.8% of the respondents.
- Another Y2K Cause of Increasing 1999 Costs ........... as
new government regulations and a failure to upgrade computer systems may
lead to increased logistics costs for many shippers this year, according to
the annual "State of Logistics Report" of Cass, a St. Louis-based
bank holding company. Inventory management is still a problem for many
shippers. "We have not taken inventory out of the system," a
spokesman for the report said. "We are merely shifting where inventory
is held within the supply chain." According to European software firm,
Cap Gemini Group, about 38% of U.S. companies are stockpiling inventory as
part of their year 2000 contingency plans, a move which will increase short
term costs. Xerox says it will add one month's supply of all parts needed to
produce printers and printers in safety stock. The Far Eastern Freight
Conference has already announced higher rates shippers may have to pay due
to tight space arising from what it calls the 'Millennium Boom.' NOTE: Read
a new non-transport report on this important Y2K issue: http://www.y2kglobalsolutions.com/report
- Shifting China Trade ............ as mainland's trade
with Hong Kong fell by almost a third in the 1st quarter of the year, with
the total value of trade down 30.1% at US$10.95B. Mainland exports were
hardest hit during the quarter, falling 34.4% to US$8.98B. Imports edged
lower by 0.5% to US$1.97B. Japan remained China's largest trading partner
with a 7.5% increase in overall trade during the period. A 15.3% increase in
imports to US$9.55B drove the growth. Japan-mainland trade was worth
US$18.8B during the 3 months as exports inched up 0.5% to US$9.26B. The U.S.
remained in 2nd place, with total trade up 8.4%, amounting to US$16.89B.
Exports & imports both rose strongly, the former rising 7.9% to
US$11.22B. Imports were up 9.5% to $5.67B. China imported a massive 43.5%
more from the European Union in the January-to-April period to US$7.28B.
Exports to the EU were down 2.1%, with overall trade up 15% to $15.61B. For
May 1999, overall China foreign trade grew 11.7% compared with the same
month last year to US$29.19B.
- Guangdong Way Off ........... as province trade figures
show that the Asian recession has finally caught up with China's eastern
seaboard. Export figures for January 1999 were down 40% compared same period
1998. Guangdong's exports for January to April were down about 18% in
- Thailand Slows ........... as the government is concerned
it may not be able to meet this year's growth target after exports showed
only a 1% year-on-year fall in April. Exports during the month reached
US$4.29B, while imports showed a 1.49% rise over April 1998 to US$3.67B,
resulting in an April trade surplus of US$618M. The finance ministry said
exports during the 1st quarter slid 3.8% in US dollar terms, far below
government targets. January to March exports for this year were valued at
US$13B a fall of US$522M compared with the same period last year.
- The International Logistics Chain .......... a new online
tutorial from The Cargo Letter. This is a truly helpful aid to both staff
and customers in understanding how our industry works. http://www.cargolaw.com/logistics.html
- The Force Was With Danzas ........... as "Star Wars
Episode I: The Phantom Menace" opened at 5,000 theaters across the U.S.
on May 19, on schedule, thanks to some logistics savvy at Danzas &
Entertainment Transportation Specialists. Because the threat of theft was so
high, an inconspicuous case was designed to carry the 7 reels of film per
master print. There were no markings that would disclose the "Star
Wars" prize inside. Thanks Danzas!
- New Circle Chiefs .......... as Circle Int'l has
appointed Randy G. Sinker division V.P. for the North American central
region, and Rosalie Ben-Joseph V.P. of ocean services. Sinker will be
responsible for the marketing, operations & financial results of
Circle's business in 12 northern border offices. Ben-Joseph will manage
Circle's ocean freight business, including exports, imports, forwarding
& consolidation. She worked 20 years for APL, including 11 as V.P. of
region sales for ACS Logistics, the forwarding division of APL.
- The Object of AEI's Secret Affection ............ as Air
Express Int'l plans to buy another U.S.-based forwarder with a strong U.S.
import business from Asia, the company said this month. AEI would not
disclose the company's identity, but said the forwarder operates
predominantly in Hong Kong, Taiwan & southern China. AEI management said
it expects to sign a deal by the end of July. The acquisition would give AEI
an immediate presence in the "buyers consolidation business,"
where forwarders take orders from vendors in Asia, consolidate the orders
into containers & ship them to manufacturers & retailers in the U.S.
- Conterm & ECU Settle ............. as California
based non-vessel-operating common carriers Conterm Int'l & ECU Line USA
have "amicably resolved" all outstanding legal issues from a
lawsuit filed in the L.A. Superior Court. The suit, filed by Conterm earlier
this year war far from amicable, alleging that former president Peter
Gruettner & other Conterm staffers took company secrets with him when
they joined ECU. Both companies said the details of the settlement agreement
are covered by a confidentiality clause and will not be disclosed. "I'm
glad this ordeal is over," Gruettner said. "Now I can focus my
attention on building ECU Line & serving the freight forwarding
- 2nd New Owner For Wilson ............. as BTL, the
Swedish transport group, has agreed to sell the Wilson Group, its air &
ocean freight forwarding arm, to Nordic Capital, a venture capital company.
BTL, which was recently acquired by Germany's Stinnes/Schenker group, will
now transfer to Nordic Capital the Wilson forwarding & logistics
businesses that have annual sales of about US$680M.
- Skynet Holdings Has Tamed The Pony ............ as it has
completed the acquisition of privately held Pony Express Delivery Services,
Atlanta, on undisclosed terms. Founded in 1860, Pony Express,
"America's First Express Company," is one of the largest regional
ground delivery service providers in the U.S., with revenue in excess of
US$100M annually. Skynet's revenue was approximately US$55M for the most
recent 12 month period. Pony Express handles more than 32 million packages
each year through 100 offices in 22 states, specializing in the
business-to-business market. Skynet Holdings, headquartered in Los Angeles,
is primarily an Int'l express courier for time-sensitive documents &
- Dutch Post Office Charges The Net .......... as since its
owner TNT Group first listed last June on the Amsterdam, New York,
Frankfurt, & London Stock Exchanges, its shares have soared from US$20
to US$30 and outperform the Amsterdam Stock Market index by more than 10%.
Now, TNT wants to give tech-savvy U.S. rivals Federal Express and UPS a run
for their money by becoming a dominant player in the Net-tracking and
delivery business, whether the goods being sent are bytes, or paper letters
& packages. Dutch postal service TNT is adding Net services to challenge
FedEx and UPS. But its E-biz strategy -- grabbing corporate clients and
E-merchants -- could shake things up even more. Read the Business Week
- Smooth Split Ends Conrail .......... as after an 8 hour
computer-system shutdown last month, trains began operations again last with
Conrail having been divided for it's two new operators, CSX Transportation
& Norfolk Southern. The successor carriers said that, apart from a few
minor problems, the division had gone well and the its new system was up
& running smoothly. Norfolk Southern noted some glitches in transferring
data from its own system to Conrail's, with the result that some rail cars
had to be located & directed manually. NS has acquired 34,000 employees
from Conrail, and will expand its rail service in the US & Canada to
about 21,600 miles of track. For its part, CSXT will take on 6,200 former
workers from Conrail and will get about 4,400 miles of extra rail line. CSXT
& NS have said they look forward to improved revenue with their acquired
- Smooth Marriage For CN & IC?............. as merger
between the Canadian National Railway Co. & the Illinois Central Corp.
has cleared its final hurdle with the granting of approval by the US Surface
Transportation Board. Merger of the companies will create a system of 27,000
kms. of track across North America to generate about US$3.5B annually.
- New Rail Partners ............. as Maersk Inc. & Rail
Van Inc. have entered into a joint venture to provide domestic services in
North America, under the name "Maersk-Rail Van" which is expected
to be fully operational during 3rd quarter of 1999. The venture combines
Maersk's Int'l shipping network with Rail Van, a leading intermodal
marketing company. The companies will take advantage of provisions in the
Ocean Shipping Reform Act of 1998 that allow "ocean carriers to partner
with inland transportation companies." Rail Van, said the partnership
"will provide us immediate access to a larger pool of equipment, while
retaining complete flexibility to provide our customers with the best
service options available".
- Intermodal Marketer Purchased ............ as WorldPoint
Logistics, a Seattle area logistics holding company, has acquired United
States Shippers Inc., the largest intermodal marketing company in the
- Burlington Fires, While UP Hires ............. as
Burlington Northern Santa Fe Corp. will cut 1,400 jobs over the next year as
the railroad attempts to become more competitive & lower costs. Seven
percent, or 400, of the company's 5,200 salaried positions will be cut. In
addition, another 1,000 union jobs will be eliminated. ``We're in the
process of identifying where those (1,000) positions are, and that will take
the better part of 3 to 4 weeks,'' said a railroad spokesman in late May.
BNSF, the 2nd largest railway company in the U.S. with 34,000 route miles,
is cutting back at the same time the country's largest railroad, Union
Pacific Corp., has been hiring at record levels and has spent nearly US$1.5B
in upgrading its track & trains. Burlington Northern bought Santa Fe in
1995 & Union Pacific took over Southern Pacific the following year. The
2 companies will control 90% of freight west of the Mississippi River.
- Pacer Hits The Rails & Opens Huge In L.A. ...........
as its acquisition of the North American stacktrain business formerly
operated by APL is now final. Pacer Int'l agreed to buy APL's profitable
stacktrain service for US$315M. The business will operate under the name
Pacer Stacktrain and is supported by a 20-year operating agreement.
Stacktrain operates throughout the U.S., Mexico & Canada. Existing
management and the estimated 200 employees connected to the stacktrain unit
will be transferred to Pacer. To expand its So. California freight
capabilities Pacer has just opened a new 325,000-square-foot facility at Los
Angeles for cross-dock operations, transloading and warehousing of Int'l
& domestic shipments. The new facility is located on the Alameda
Corridor & scheduled for occupancy on July 12.
- There's Only One True Original Left ........... as the
Union Pacific Rail Road is the only U.S. line which continues to operate
under the same name it had when pulling its first train over 140 years ago.
- Killing Freight Forwarders With Flying Trucks ...........
as Consolidated Freightways (CF) has become the 1st U.S. LTL motor carrier
to join the Int'l Air Transport Assn. (IATA). As a certified IATA agent, CF
books air freight through a network of 263 member carriers, such as United,
American, Delta, Lufthansa, British Air & Northwest/KLM. "We're
taking the freight forwarder out of the equation," says Steve Redmond,
director of CF's PrimeTime Air division. CF was certified through Cargo
Network Services Corporation (CNSC), a subsidiary of IATA.
- NationsWay Crashes ............... as another major
unionized LTL motor truck carrier is shuttered. Denver based NationsWay
trucking, the largest privately held LTL concern in the U.S., filed for
bankruptcy on 20 May, surprising shippers & employees alike. Jerry
McMorris, founder of the 40-year-old carrier, is liquidating the carrier
rather than reorganizing. NationsWay listed assets between US$10M &
US$50M, with debts of more than US$100M. ABF Freight System, the nation's
4th largest U.S. LTL carrier, made an arrangement with NationsWay to service
- Yellow Freight Will Buy Jevic Transportation ........ as
the deal is set for about US$200M. The Jevic Board has recommended that its
shareholders accept a tender offer by Yellow to acquire all shares of Jevic
at US$14 per share.
- Vitesse Bought ........ as the Rotterdam based logistics
provider is to be taken over by Geodis in France, one of the biggest
logistic groups in Europe.
- Central Freight Buys ............ as the LTL carrier has
acquired Jaguar Fast Freight, Inc., an Arizona based LTL carrier. Jaguar is
the largest intra-Arizona LTL carrier and had revenues of approximately
US$16M in 1998, operating from 11 company owned terminal locations.
- Hellmann Worldwide Logistics Bigger In Toronto
........... as its new facility opens near the future Air Cargo Center at
Pearson Int'l Airport, Toronto. In addition to housing the headquarters of
Hellmann Canada, the 30,000 square foot facility includes a 24,000 square
foot bonded warehouse & CFS. The company's previous Toronto facility
covered only 3,000 square feet.
- Up, Up & Away .......... as the once 'ridiculous
idea' of using an airship for goods transport has new turned into a serious
project. The world's biggest flower auction, at Aalsmeer, near Amsterdam
Airport, sees considerable prospects for the idea. In the future, the Flower
Auction at Aalsmeer wants to deploy an airship for the transport of cut
flowers over short distances, to escape highway gridlock. It will be mainly
used for transport to other actions in the Netherlands, which are located up
to 80 kms. away. Rigid Airship Design Co. is preparing a prototype.
- And Here Comes CargoLifter ......... as the U.S. company
has developed an airship for transporting large & heavy loads. These
semi-rigid airships, almost 3 football fields in length, will transport
shipments weighing upwards of 160 metric tons over distances of up to 6,000
miles, nonstop. Test flights of the prototype CL-160 airship are scheduled
for 2001, with operation of the "flying crane" from 2002. There's
live web cam at the CargoLifter site. http://www.cargolifter.com/
- Iraq Learns About The Value of Laws ........... as
authorities have mounted a nationwide crackdown on those who smuggle
gasoline to neighboring countries, slapping them with stiff penalties that
include a minimum prison term of 10 years. The measures are to discourage a
lucrative contraband trade in smuggling gasoline to Jordan & Turkey,
where prices are considerably higher. Last month, Iraq's Revolutionary
Command Council passed a law making the smuggling of gasoline tantamount to
economic sabotage, an offense which could entail the death sentence. On the
other hand, U.S. & British diplomats have repeatedly accused Baghdad of
shipping huge amounts of oil & products outside the frame of the
U.N.-approved oil deal allowing Iraq exports of US$5.2B every 6 months.
- Customs Got The "Jump" On Him ......... as a
man dubbed ``Captain Jump Off'', because he would make smuggled illegal
immigrants jump from his boat into choppy surf, was sentenced to life in
prison this month for drug smuggling. Richard B. Barker, 47, was arrested
last fall in the Bahamas, a month after he escaped a high-seas shootout with
U.S. Customs agents. He had been using a 35-foot speedboat to deliver 1,100
pounds of cocaine 15 miles off of Grand Bahama Island. In 1994, four
Haitians drowned after they were forced off his boat near the Florida coast.
Barker was convicted of negligent homicide, but was paroled after spending
less than 4 years in prison.
- U.S. & Partners Strike ......... as they seized more
than 11 tons of cocaine in 6 incidents in the Caribbean during 3 weeks in
May & June. It is estimated that the seizures prevented 103 million
street-level doses from reaching the U.S., the Caribbean Islands, Europe
& Africa. In the 2 largest and most recent cases, the HMS Marlborough,
carrying U.S. Coast Guard law enforcement detachments, boarded M/V China
Breeze & M/V Castor. The China Breeze, Panamanian-registered general
cargo, was boarded May 27 south of Puerto Rico. Hidden amid the cargo and
behind concealed panels were 8,800 pounds of cocaine, the 11th largest
seizure in maritime history. The Castor, also a Panamanian, was boarded May
31 north of Venezuela. It had 8,687 pounds of cocaine aboard, the 12th
largest seizure on record. The ships were being escorted to Galveston &
Miami for continued investigation. The interdiction efforts were carried out
by U.S. Coast Guard, as well as the Britain's Royal Navy, DEA, FBI &
Customs Service and Puerto Rico's Forces United for Rapid Action.
- Banana War Continues ............ as the World Trade
Organization agreed this month to appoint a panel to consider whether the
U.S. acted illegally in imposing sanctions in its banana trade battle with
the European Union. The EU claims Washington moved illegally in forcing
importers to post a bond to cover proposed 100 percent import tariffs on a
range of European products earlier this year. The sanctions were valued at
US$520M per year -- the amount the U.S. claimed it was losing through EC
rules on imports of bananas from Latin American producers and their American
distributors. The WTO later ruled that the U.S. did have the right to impose
sanctions, but only a total of US$191.2M. The U.S. lifted sanctions on the
rest of the goods, but the Europeans claimed the damage had already been
done. Sanctions are still in place on a range of EU goods while the EU works
to bring its banana import policies into line with Int'l trade laws. The
U.S. & a number of other countries say the policy favors producers in
former European colonies in the Caribbean & Africa.
- Circle Int'l Gets 3Com Brokerage ............. as it has
been selected by 3Com Corp. as national customs broker for all 3Com
shipments moving into the U.S., more than 8,000 annually.
- Customs Reconciliation Kicks Off ............. as 1st
entries under a Customs prototype, "Reconciliation," have been
successfully filed in Laredo & New York by importers. The reality of
modern Int'l trade is that many elements of a given transaction may not have
been determined at the time of entry. Reconciliation replaces the outmoded
concept of entry-by-entry filing. Reconciliation allows the importer, using
reasonable care, to file entry summaries with Customs using best available
information, with the mutual understanding that certain elements, such as
the declared value, remain outstanding. At a later date up to 15 months
later, when the specifics have been determined, the importer files a
Reconciliation which provides the final & correct information. The
Reconciliation is then liquidated, with a single bill or refund, as
appropriate. For Customs, implementation of the reconciliation prototype
gives the agency the means to comply with the Chief Financial Officers (CFO)
Act to manage fiscal matters in responsible, auditable ways, maintaining
strict financial controls over monies the agency handles. To date, over
560,000 entries have been identified for reconciliation, and over 1,200
importers are participating in the prototype. "Working with industry,
Customs is redesigning trade compliance, as mandated by the Customs
Modernization Act (Mod Act)," said Customs Commissioner Raymond W.
Kelly. "This portion of the process -- reconciliation -- gives industry
better service, while giving U.S. Customs better control over the money it
collects on behalf of U.S. citizens." Customs implemented the
Reconciliation Prototype on October 1, 1998 as the exclusive means for
making post-entry adjustments as to value, NAFTA eligibility, U.S. component
value (9802), and some classification. http://www.customs.gov/recon
- Customs Funding Drags .......... as its request for
funding for a complete systems upgrade is getting slow approval. Customs is
pushing for money to build the proposed Automated Commercial Environment
(ACE), a complete system to handle customs functions. The U.S. Senate has so
far granted only US$50M in spending on the ACE system which is expected to
cost $1.6B. The Senate's US$50M comes on top of $150M in funding for the ACE
system passed by the U.S. Congress. The Senate still has to approve the bill
that authorizes spending this US$150M, a move expected to draw some
opposition within the Senate. However, The U.S. Customs would get more money
to fight drug trafficking & online child pornography under legislation
passed by the Congress in late May. The bill, passed on a 410-2 vote, would
allow Customs an additional 1,745 officers to work along the borders &
at major drug and money-laundering locations. It provides US$10M, up from
the current US$2.4M, for the Child Pornography & Sexual Exploitation
Program, which tracks Int'l Internet sex predators and traffic in child
pornography. The bill authorizes US$2.4B for Customs in fiscal 2000 &
2001, US$400M more than the administration requested. It includes US$150M
each year to help the agency replace its 16-year-old computer system. As
discussed below, the ancient computer system has had difficulty.
- New Customs Invention: Paper ............ as it's is
planning to test the ability to handle paper import entries in case the
current Automated Commercial System shuts down before ACE is up &
running (see previous story). In cooperation with two undisclosed ports,
Customs plans to carry out 24 hours of tests to examine its capabilities
should the old system shut down -- which it has threatened to do on a number
of occasions over the past year. The tests will provide a unique opportunity
to examine in detail Customs ability to go manual. The focus will be mainly
on clearing & examining imports as well as collecting import duties
based on paper documents. Earlier this year, the Port of Houston planned a
similar test but complaints from importers resulted in the plan being
scrapped. The latest tests will be carried out while the ACS is still
running as a shutdown of the system would be too costly & disruptive.
- Customs Gets Training Chief ............. as the newly
formed Office of Training has appointed Marjorie Budd as Assistant
Commissioner. Ms Budd will orchestrate the agency's entire training process
from entry-level to senior management. Customs said the appointment would
bolster the integrity of the department as Ms Budd has more than 15 years'
experience managing training offices of government agencies such as the
Dept. of Defense.
- MIA Forwarder In Fishy Business .......... as the
Associated Press reports guilty pleas to fraud for passing off nearly US$6M
worth of swordfish as whitefish to get around screenings for a poisonous
chemical. Miami based Kenbourne Int'l & its freight forwarder, Fresh
Cargo Handling Co., were charged with 2 felonies for telling its supplier to
mislabel all its swordfish shipments in 1994. The two pleaded guilty last
month in federal court. Whitefish such as halibut, carp, flounder & sea
bass don't undergo the rigid screening for methyl-mercury that the Food and
Drug Administration requires of swordfish. Testing fish samples takes time,
stalling shipments and forcing importers to freeze their fish. The fish in
question was sold without having been tested. Prosecutors said they will
recommend to a judge that the 2 companies serve a 4 year probation and pay a
- But Customs Couldn't Find The Worm .............as a
tanker truck load of tequila sprang a leak at Opelousas, LA, while moving in
bond from Mexico to a distiller in Florida. ``Who's going to Winn Dixie
(supermarket) to get the limes?'' joked Trooper John Dayries of the
Louisiana State Police Haz Mat Unit. But sadly, it was considered a hazard,
not an opportunity to break out shot glasses & salt shakers. The truck
had stalled by some railroad tracks. About 10 gallons were caught &
disposed of safely on 5 June. U.S. Customs officials supervised the tequila
transfer into another tanker to complete the trip. The owner, Reynolds
Nationwide Inc. of San Antonio, was ticketed for operating a leaking
container holding a flammable liquid.
- U.S. Export Directory Goes "E" ......... as the
Dept. of Commerce has a new web site project underway entitled the
"U.S. Exporters Yellow Pages." Now featuring over 20,000 service
providers, manufacturers & trading companies, you can be added for a
small charge. Act before 30 June and be added to the print version. The site
is also a great search tool. http://docexport.com/
- Dutch Forwarders Go More "E" ........... as
industry members in the Netherlands will raise their investments in
information technology (IT) from 15% in 1998 to 30% in 1999. This comes
despite an expected decline in total investments for the year, from US$200M
in 1998 to US$150M in 1999. The increase in IT investment points to growing
interest in logistic services. Forwarders are investing in IT to increase
competitiveness through efficiency. Forwarders in the Netherlands are
feeling growing profit pressure. In 1999 the growth in volume will amount to
only half of the 15% increase of 1999. Of the more that 300 affiliated
forwarders in the region, about 85% were profitable in 1998. Analysts expect
this percentage to drop in 1999.
- U.S. Senate Passes Industry Friendly Y2K Bill ...........
as S.1138, the "Year 2000 Remediation Encouragement Act" may soon
become law. The Act passed the U.S. Senate by a vote of 62-37. A similar
bill passed the House earlier this spring. The bill would encourage
businesses to remediate Y2K-related computer problems while discouraging
legal actions when companies take proper actions to fix the problems. The
provisions of the Y2K Act would discourage frivolous class action lawsuits
related to Y2K by preserving the enforceability of existing contracts,
establishing a cure period for Y2K disputes and allowing a reasonable
efforts claim into evidence in contractual disputes. The bill will now go to
conference to work out any remaining questions before moving to the White
House for President Clinton to sign. For more on the issues, go to the ITAA
- Lufthansa Takes Top Web Honors .......... as it took
first prize at the annual 'World Wide Web 100 Survey 1999' sponsored by The
Financial Times of London. The findings noted the user-friendliness of the
web site by the test bookings, ticket auctions & special offers with
online booking. The contest was organized by The London School of Economics.
- Web Based Supply Chain Training ............. as EXE
Technologies, Inc., a provider of supply chain execution software, has
announced Web-Based Training (WBT) as an addition to it's "EXE
University." The WBT program encompasses a live instructor &
hands-on training, while eliminating attendee travel costs. The program uses
a virtual classroom via the World Wide Web in conjunction with an offline
interactive curriculum to provide students with training on EXE's EXceed
products. In the online virtual classroom, students interact with a live
instructor, other students and complete exercises on a live version of
EXceed software without traveling from their own locations. http://www.exe.com
- "E"xcellent News For Cargo Security
............ as Unisys Corp. has announced the integration of radio
frequency identification (RFID) tag technology into its Virtual Integrator
Suite (VIS) to provide airlines & freight forwarders with a proactive
shipment control solution. The RFID technology provides in-transit
management capabilities as well as performance reports via the Internet.
This is the 1st time that this enabling technology has been commercially
available to the traditional air cargo industry. Unisys VIS can deliver
end-to-end total cycle control & asset visibility to carriers &
forwarders for global, time-definite, 48- to 72-hour, door-to-door cargo
services. VIS lowers operating costs by providing timely & accurate
information on the location, movement, status & identity of cargo down
to the individual piece level and streamlining freight handling processes.
VIS even provides real-time controls including alerts when shipments are in
danger of missing a predetermined cycle milestone. The U.S. Army uses the
system to handle global movement of supplies & ammunition. http://www.unisys.com
- Time & Temperature Right On The Button ............
as Dallas Semiconductor has announced the Thermochron iButton, the 1st
single-chip time & temperature logging device that is submersible,
dirt/impact resistant & Internet-ready upon delivery. Applications for
the Thermochron iButton include in-container monitoring of
temperature-sensitive goods such as frozen foods, fresh produce, chemicals,
medical reagents & medical specimens like blood. The iButton form factor
makes the device very easy to attach to existing transportation items, such
as containers, pallets, and semi-trailers. It can survive rough handling
& harsh environments. The Thermochron can function either as a stand
alone instrument as it roams or it can be networked to interact with
audio/visual indicators, displays, hand-held or notebook computers, and
Internet Web pages so real time data can be viewed by both forwarders &
their customs from anywhere. The Thermochron iButton is available from stock
and priced at US$10.00 in quantities of 1,000. The Thermochron iButton
Evaluation Kit, available for US$25. Downloadable evaluation software is
available at no charge. http://www.iButton.com
- UPS Delivery In Real Time .......... as the express
company is deploying the 1st device in the industry to both collect &
send delivery information at virtually the same time. Now when a package is
delivered, the tracking data will be widely available before the driver has
even left the scene. The device, which houses an internal radio, also allows
drivers to receive immediate notice of customer requests for on-demand
services such as urgent pickups. This 3rd generation Delivery Information
Acquisition Device, or DIAD III is the only device of its kind to transmit
real-time delivery information independent of the delivery vehicle. Its
predecessor required the communications cradle inside the vehicle to
transmit tracking information & to receive dispatches. Developed at a
cost of US$100M, DIAD III begins its rollout on 14 June in 13 metropolitan
areas across the U.S. In addition to the internal radio, cellular
communications can upload information from the delivery vehicle, and an
internal modem with automatic dialer enables DIAD III to transmit data over
a normal telephone.
- CNA Insurance Is All At Sea ........... as it has
announced the creation of CNA Maritime, a new marine marketing brand that
combines the expertise & resources of its New York-based MOAC operation
with those of London-based Maritime Insurance Company Ltd., which was
acquired through CNA U.K. Holdings Limited last July. Both companies will be
divisions of CNA Maritime. Effective immediately, MOAC will be known as
MOAC, A CNA Maritime Division, while Maritime Insurance will use CNA
Maritime in place of the Maritime Insurance name. With 1998 revenues of
US$17.1B, CNA ranks among the top 10 U.S. insurance groups.
- Shooting Up At The Truck Stop .......... as drivers'
organization Les Routiers Européens has called on the management of Dutch
highway restaurants to install a bluish lighting in their rest rooms. Due to
the blue glow the junkies are unable to distinguish their veins to help them
in giving themselves a shot. The idea was picked up by Shell filling station
De Langehorst along the A2 near Beesd where drug addicts have caused a lot
of problems. Since installation of the blue lamps, drug problems at the
truck stops have declined.
- Air France. DOWN 11% with net profit of US$239M, in the
year ended March 31. Revenue for the year rose to US$8.75B. A 10-day strike
by Air France pilots last June just as the World Cup was getting underway
cost the airline an estimated US$32.3M. Cargo revenues fell 12% and its
cargo unit posted a net loss for the full year.
- DSR-Senator. Said UP, as it will make a profit in
calendar year 1999, for the 1st time since it was acquired by Hanjin in
early 1997. DSR-Senator, originally named Senator Lines, has never made a
profit since it was established in 1987.
- Finnair. DOWN with a 33% drop in net earnings to US$61M
for the fiscal year ending March 31.
- Frontier Air. UP with fiscal year 1999 net income of
US$30.6M, or US$1.98 per fully diluted common share, an improvement over
fiscal year 1998 when the airline reported a net loss of US$17.7M. This is
the airlines, 1st profitable year, ever.
- Global Ocean Carriers. DOWN with a loss of US$600,000 for
1st quarter 1999. This is half the losses the company reported for the same
period in 1998, when it lost US$1.3M.
- Gulf Air. DOWN with profit decline for 1998 of 80%. This
announcement follows a statement from the company, issued in September, that
it expected a year-on-year decline in net revenue of only 37% in 1998. The
airline earned US$48M in 1997.
- K Line. UP with a 4% rise in profit for its latest fiscal
year, ending March 31. The company reported a US$14.1M profit for 1998,
compared to 1997's profit of US$13.3M.
- Martinair. UP for its 40th year of operation in the
airline industry, with a pretax profit of US$39.4M on net revenues of
- Mitsui OSK. UP with a 14% increase in group operating
profit to Yen 53.5 billion, against a Yen 47.2 billion profit the previous
- Panalpina. UP with another record for the 1998 financial
year. Net income, which doubled in the previous year, grew again by 18.7%.
- Railtrack (British rail) UP with an operating profit of
US$754M for its latest fiscal year, an 18% increase on the previous year's
- Wilhelsen Line. DOWN with a 64% drop in net operating
income for the first 4 months of 1999, compared with the same period last
year. The January to April figure fell from US$33M in 1998 to US$12M this
year. Plunging profits were also reflected in the net income for the period,
US$6 M, compared with a profit of US$21M for same period in 1998.
- Air Profits Will Continue Down ............ as even
alliances between major airlines will fail to stop profits falling for a 2nd
successive year, says IATA. Profits for 1999 will be 13% down on 1998,
according to the annual report of the Int'l Air Transport Association
(IATA). The expected decline follows the 1998 slump, when profits fell to
US$3.1B, down almost 40% compared with 1997. Financial crises throughout the
world, notably in Latin America, Russia & Asia, have been blamed for the
current slump. The forecast comes despite attempts to cut costs and improve
profitability by setting up network alliances such as Oneworld, the British
Airways-American Airlines grouping, and the United -Lufthansa-SAS vehicle
- EU Air Cargo Revenue Down ......... as freight ton
kilometers (RFTK) dropped by 6.9% in Europe for the 1st quarter of this year
compared to figures for the same period last year, according to the Assn. of
European Airlines (AEA). RFTK's for the mid Atlantic plunged by 10.8% to
302.4 with the South Atlantic falling 5.4% to 321.4. The North Atlantic
provided some slight relief with figures rising 7% to 2,270.2. AEA members
include British Airways, KLM, Lufthansa, Air France & Aer Lingus.
- "Peace" Has Not Reopened Skies ........... as
European Commission has renewed a ban on flights between the Yugoslav
Federation & member nations of the EU. The EC said that it is also
considering extending the ban to disallow all aircraft registered in
Yugoslavia from flying to the EU from any point.
- Welcome Austin-Bergstrom Int'l ............ as Austin's
new US$585M airport is the 1st major airport to open in the U.S. since
Denver Int'l opened in 1995. The former Bergstrom Air Force Base is the 1st
to be converted to a major commercial airport since the end of the Cold War.
- Happy Birthday Mr. Boeing ............ as 30 years ago,
the Boeing 747-100 made its historic debut at the Paris Air Show. Who knew
it had been that long? Of the 1,100 747s in the world fleet today, more than
40% are 747-400s, which this year celebrates 10 years of service. Compared
to the original 747, the 747-400 has significantly increased its range,
passenger capacity, takeoff weight, engine thrust & dispatch
reliability. And the 747 remains the world's fastest subsonic commercial
jetliner. Boeing is also happy over a Letter of Intent to supply
passenger-to-freighter modification services for 19 additional MD-11s for
the FedEx fleet.
- Airports Eating Airports .............. as Amsterdam
Airport Schiphol, acting with the British Airport Authority, has made an
offer for 49% of the shares in the main airport of Indonesia, Sukarno-Hatta
Airport near Jakarta.
- New Code Shares ..........Air France chooses Delta, not
Continental Airlines as expected, to be the new alliance partner, according
to the publication Les Echos. The agreement is subject to Air France
obtaining approval from its board. Meanwhile, Northwest Air & Japan Air
System have entered an alliance that will boost the service from the U.S. to
& from Japan and the rest of Asia
- BA's Heathrow Woe ............ as British Airways' new
handling center at Heathrow Airport is still encountering problems, despite
BA's efforts to fix the system. Courier customers say they are having to
continue using rival airlines because freight is still failing to make
flights to Europe, the Middle East & North America. BA said it was
sending staff to individual customers in the hope of overcoming
difficulties, but courier officials said they were losing patience with BA.
Express freight operators traditionally build strong relationships with
carriers, making it painful to have to switch to rival companies. Some have
reported a gradual improvement in BA's service, with only isolated services
- Our Struggling PAL May Have A Sting .......... as Asia's
oldest airline, Philippine Airlines, remains under bankruptcy
administration, while its rehabilitation plan, involving a capital injection
of US$200M, is being challenged by key creditors. However, industry insiders
have claimed that PALis pressuring the Philippine government to rescind the
rights of some foreign carriers to land in Manila. It would pay to be the
only game in town. Meanwhile, the current bankruptcy plan would see PAL's
majority shareholder & chairman, Lucio Tan, putting in US$100M, with
US$70M of equity participation coming from Hong Kong businesses. The
remaining US$30M is to be supplied by Philippine government financial
institutions, which are minority shareholders. The plan would also see
German carrier Lufthansa managing the marketing side of PAL. But key
creditors have already pulled out of the plan, questioning the accuracy of
the voting in support of it. Philippine National Bank & the US
Export-Import Bank have called for the release of the names of the creditors
which approved the plan. Eximbank, together with a group of European export
credit agencies, are owed almost 70% of PAL's debt and have liens on 16 of
the airline's 22 planes. However, Securities & Exchange Commission
chairman Perfecto Yasay insists the rehab plan will go ahead. Even with
Yasay's support, the flag carrier's troubles look far from over. The
minority-shareholding state financial institutions are unlikely to come up
with the US$30M required of them. We'll watch now to see if there is a sting
in PAL's tail.
- Taking On The World ............. as Hollis Harris, the
new chief at troubled World Airways, may have to change his tactics if he is
to turn the fortunes of the Virginia based carrier around. Mr. Harris, as
CEO of Air Canada for 6 years, advocated a recovery plan that included the
sale of the airline's five DC-8F freighters to concentrate on the carrier's
core business. But World Airways has already pinned its survival hopes on a
larger air cargo profile and analysts have argued that the airline needs to
make a determined stance on a shift from a passenger & combis fleet to a
dedicated freighter operation.
- New LAX Chief .............. as L.A. City Mayor Richard
J. Riordan has appointed Lydia H. Kennard interim executive director of Los
Angeles World Airports. Kennard will assume her new position on Aug. 18,
1999, upon the retirement of current LAWA Executive Director John J.
Driscoll. During the past 5 years, Kennard has served as 1st deputy
executive director of the department's four airports: LAX, Ontario Int'l,
Van Nuys & Palmdale Regional.
- Man In The Tower ........... as The Wall Street
Transcript has published an in-depth interview with Morris K. Nachtomi, CEO
of Tower Air, in which he talks at length about his company's future. He
says, "In 1983, when we started operations, our scheduled service
revenue base was shy of US$20M. We closed 1998 with a scheduled service
revenue of approximately US$323M." He states, "In addition to our
scheduled service, we offer cargo charter services, normally for other
airlines and shippers, and we offer commercial charter flights for tour
operators and for special operations. The one we are involved in right now
is bringing refugees from Kosovo to the U.S. We were the 1st carrier to
bring refugees from Kosovo to the U.S. and are transporting the vast
majority of them." http://www.twst.com/ceos.htm
- Continental Goes Peruvian ........... as creditors of
grounded Aeroperu are considering an offer from Continental Airlines to take
control of the debt-ridden carrier. Aeroperu, which owes more than US$165M
to creditors, has been grounded for almost 3 months. If Continental's offer
is accepted, the Peruvian carrier could soon fly again. Under the proposal,
Continental would manage the airline's operations and hold a 49% stake. In
another Latin American move, Continental & Copa Airlines of Panama
announced they will begin the 1st phase of a code-share alliance linking
some of their domestic & Int'l flights.
- Airborne Partners With The Post ........... as Airborne
Express is jumping into the home delivery market after joining with the U.S.
Postal Service to move packages from businesses to consumers' doors. The
service product will be known as "Airborne@Home". Under the
agreement, Airborne will take its customers' freight to the Postal Service's
local drops. From there, the Airborne packages become USPS property, with
the mail couriers to make final door delivery.
- KLM Leaves Bride At Altar .......... as it has canceled
announced plans to acquire the 50% shareholding of charter airline Martinair
that it doesn't already own in the face of opposition from the European
Union. "KLM and the European Commission have not succeeded in reaching
agreement on the details of the measures which the Commission wished to see
implemented before it could approve the transaction," KLM said in a
statement, adding it consulted with shipping group P&O Nedlloyd, which
owns the 50% share KLM was to buy, and Martinair before withdrawing its
plan. The existing relations between KLM & Martinair will not be
affected by KLM's decision, according to both carriers.
- Atlas Air Diet Pays Off ......... as it has just been
ranked by Air Watch Report, a leading independent research firm that
analyzes the financial posture of the world's airlines, as the most
financially fit airline operating in the world. Air Watch Report tracks the
financial fitness of a universe of 167 airlines throughout the world, using
its proprietary financial model, and then ranks the results accordingly.
This ranking, which was based on Atlas Air's financial results through the
4th Quarter of 1998, moved Atlas from 5th place to 1st in Air Watch Report's
- Heavy Deal For Fritz ........... as Cummins Engine
Company, Inc., the worldwide manufacturer of diesel engines & related
machines, has selected Fritz Companies as its primary air freight provider.
The selection means that Fritz will handle the majority of Cummins' air
freight world shipments. Fritz began its relationship with Cummins 30 years
- Delta Gets The Nod ......... as it has been named
"Best Managed Major Airline" for 1999 in a poll conducted by
Aviation Week & Space Technology magazine.
- FedEx Honored .......... as the carrier it's RPS Inc.
subsidiary, were recently named "Carriers of the Year" by
Wal-Mart, the nation's leading discount retailer. FedEx & RPS were
honored by Wal-Mart for exceptional performance in transportation services
in their respective categories, express and small package.
- UPS Jam ......... as it has signed an agreement with
Fender Int'l, the Int'l arm of the U.S.-based guitar manufacturer to manage
the company's supply chain in Europe, the Middle East & Africa. One
novel way in which UPS will be adding value to Fender's supply chain will be
by continuing Fender's practice of tuning & setting up all guitars prior
to their shipment to retailers. Will UPS have "roadies"?
- Kitty Hawk Cited ........ as the U.S. Postal Service has
named Kitty Hawk a 1999 Quality Supplier Award Winner. Kitty Hawk was
selected from among 2,000 USPS suppliers and 86 qualified applicants to
receive this award at a ceremony at Postal Service Headquarters in
- UA Keeps Building ........... as the carrier has just
opened it's new LAX hub and soon will begin work on a new LAX cargo facility
-- now United has won tentative approval to build a 13,000 square meter
cargo center at the Miami Int'l Airport. The proposed US$30M facility would
see UA through its current expansion phase in the MIA Gateway airfreight
business. UA had a 60,000 ton volume in 1998, a 27.5% increase from 1997.
- New Animal Cargo Regs Proposed .......... as the American
Society for The Prevention of Cruelty to Animals (ASPCA) has announced its
support of new Federal legislation that requires airlines to improve their
handling of animals and conditions in cargo holds, which it says currently
imperil animals' lives. U.S. Sen. Frank Lautenberg introduced the "Safe
Air Travel for Animals Act" (S.1193), citing a need to do something
about the problem after learning that as many as 5,000 animals per year are
lost, injured or killed while under the care of airlines. The new bill would
ensure that all airline air cargo holds carrying animals are equipped with
ventilation, heating & cooling systems. It raises the amount of
compensation airlines would owe when pets are lost, injured, or killed and
requires that airlines report pet-related problems as individual incidents,
instead of in "mishandled baggage" reports. The bill also directs
the Dept. of Transportation to make information about airlines' animal
safety records accessible to the public. According to the U.S. Dept. of
Agriculture's Animal & Plant Inspection Service (APHIS), virtually every
major airline, including Delta, American Airlines, & Continental, has
violated the Animal Welfare Act, which sets certain safety standards for
transporting animals. In the last year alone, the USDA has fined Delta
US$6,500, and US Airways & American Airlines US$25,000 each for
violations that included improperly kenneled animals and the deaths of
several animals from suffocation & crushing.
- Emery Under Haz Mat Investigation ............ as the FAA
is concerned over alleged violations of regulations in the shipment of
hazardous materials. Allegations include failure to notify pilots of
hazardous cargo & concealing problems from inspectors. The month-old FAA
national probe is centered on Dayton Int'l Airport, where Emery handles
almost 2,000 tons of freight daily as part of it's 4 million per day
national total. Press sources report that an Emery hazardous materials
supervisor, Debbra O Bullock, notified her Dayton superiors of the
violations on a number of occasions, but claims that her complaints met with
little response. She has since been interviewed by investigators from the
FAA's Dangerous Goods/Cargo Security Division. She continues to work at
Emery in another supervisory job. The allegations are denied by Emery.
- More Jump On The VIS Bandwagon............as Australian
Air has opted to use the Unisys-designed Virtual Interior Suite (VIS), a
software package for airfreight. VIS tracks cargo via the Internet. Unisys'
deal with Austrian Airlines, following Delta, Varig & Polar Air Cargo in
using VIS, is worth US$10M. A big attraction of VIS is the it meets the
standards of "Cargo 2000".
- DHL Now Speaks Chinese ............... as it has launched
a bilingual website in Hong Kong with features in English and traditional
& simplified Chinese. It is thought to be the first-ever bilingual
website in the air express industry for local users. http://www.dhl.com.hk
- FedEx Expands Web Reach ......... as FedEx & RPS
services are now available on Netscape Netcenter, a leading Internet portal.
Many features. http://home.netscape.com
- Sit Down And Shut Up, Mr. President ............ as
President Alberto Fujimori of Peru had to fly in coach class, and then an
American Airlines employee searched his luggage for contraband. ``It seems
impertinent, unacceptable to me that a common employee of American Airlines
searched my baggage,'' Fujimori told reporters last week. ``What they should
be doing is looking into whether American Airlines employees are smuggling
drugs.'' Fujimori complained he was bumped to economy class despite having a
1st-class ticket for a flight from Kansas City to Dallas. Because of a
mix-up, he was traveling without his usual security personnel. Fujimori did
not say in which airport his bags were searched. He compared his treatment
to what passengers deal with on Lima's cheap city buses. ``To do this to the
president of the republic is not proper conduct,'' he said. American issued
a statement expressing ``our deepest apology for any inconvenience we may
have caused the president."
- Not A Good Spot To Nap................ as an Atlanta
bound Delta Air Lines flight turned around shortly after takeoff this month
when a baggage handler was discovered accidentally locked in the cargo hold.
The flight returned to Cleveland Hopkins Int'l Airport shortly after its
5:27 a.m. takeoff when a flight attendant heard banging from inside the
hold. ``At this point, we're not sure how he got in there,'' said airline
spokesman Todd Clay. ``He appeared to be shaken up, but he was not injured
in any way.'' The cargo bin is pressurized and heated. The flight left for
Atlanta about an hour later.
- Volumes. For May, Lan Chile air cargo traffic increased
29.5%. United was up for May, with 955,780 cargo ton miles, up 2.2% over
same period 1998. Northwest's Cargo ton miles, systemwide for May were up
17.9% from 1998's 158.6 million CTMs to 187.0 million CTMs in May 1999.
American Eagle cargo ton miles were down 15.6% for May. For May, Continental
CTN's were 77,900, up 7.8%. and American's were 173,114, up 1.5%.
- Historic Vessels Take Center Stage ......... as The Cargo
Letter announces its special web site feature with visits to historic ships
that remain with us today. The feature even includes virtual tours for some
of the 40 military, merchant & cruise vessels covered. Take a Cyber Tour
of "Old Ironsides", or a virtual tour of the captured German
submarine U-505. http://www.cargolaw.com/ocean%26nvocc.html.htm#HistoricMerchantVessels
- FMC Tackles Forwarder Issue .............. as on 24 June
Federal Maritime Commission will consider a move by the National Customs
Brokers and Forwarders Assn. of America, and backed by the National
Industrial Transportation League (NIT League) to classify forwarders as
shippers, thus enabling them to form shippers associations. The proposal
expected to provoke a storm of protest from ocean carriers.
- FMC Commissioner Won Calls For Change ........... as he
wants to speed up rate reform by abolishing rate-setting agreements. This
would benefit shippers by freeing them of the need to follow voluntary rate
guidelines set by agreements to which they are party. Lines would then be
free to negotiate rates on a case-by-case basis. Commissioner Del Won, whose
investigation into carrier actions in the eastbound transpacific trades
alleged malpractice during last year's pre-holiday space crunch, made the
recommendation in response to questions asked by House Judiciary Committee
Chairman Henry Hyde, R-Ill. Hyde's query was a follow up to hearings held
last month on ocean carriers' antitrust immunity. Won's proposal would still
allow carrier agreements, including discussion agreements to engage in slot
charter and service rationalization agreements, which are said to produce
efficiencies and benefits to the shipping public.
- ANERA Under Investigation .......... as the FMC's Bureau
of Enforcement has urged the commission to fine carriers of the now-dormant
Asia North America Eastbound Rate Agreement for opting out of several
service contracts during last year's pre-holiday capacity crunch. The
bureau's attorneys challenged carrier arguments that the opt-out terms were
clearly spelled out in the service contracts shippers signed. "Contrary
to ANERA's assertions, all contract shippers did not understand the opt-out
provisions," the attorneys said. The tariff rates charged under the
opt-out actions were substantially higher than the rates agreed to by
shippers under the contracts, the FMC attorneys said. The bureau charged
that ANERA's opt-out clause was "a phantom decision which appears
nowhere in conference minutes," and that lines failed to place the
opt-out provision in at least 92 contracts. Opting out was used primarily to
increase carrier revenues during last year's peak shipping season, according
to the FMC. The FMC attorneys claimed that the carriers involved have a
history of obfuscating and mystifying otherwise straightforward terms of
conduct. They alleged the carriers were maximizing profit during the year's
busiest season. The FMC can fine the carriers between US$5,000 and $25,000 a
day for violations of rate agreements.
- U.S. Ocean Shipping Reform Act ............. as answers
to your questions about the new law may be found at our Ocean
& NVOCC Center.
- Greatest Safety Problem: Pirates! .......... as the Safe
Navigation Committee of the Asian Shipowners' Forum has issued a report
concerning two of the most pressing issues concerning safe ship navigation:
piracy & stowaways. The SNC said that piracy is arguably the single
greatest menace to modern shipping today. In 1998, the Int'l Maritime
Organization (IMO) received 210 cases of piracy & armed robberies on
ships around the world. Included were ships reported to have been hijacked
with the crews killed & cargo stolen. The committee said that 10 ships
had been attacked in the Singapore Strait in the first 3 months of this
year, as against 1 or 2 in the previous year. The Singapore Police Coast
Guard & Singapore Navy have steeped up coordinated patrols with the
Indonesia Navy & Marine Police to deter future attacks in the Strait.
Because of these incidents, Asia has become widely viewed as a piracy
hotspot, said the committee. Pirates today are well aware of the loopholes
that have been created for them and they are not slow to exploit them,
escaping from one country's waters to another, knowing that they will not
pursued or prosecuted, said the committee. On the subject of stowaways, the
committee said that this threatens crew safety and added to shipowners'
- Japan Calls Piracy Conference .......... as Japan's
Nippon Foundation, which is heavily involved in maritime safety, will meet
with the country's shipowners next month to devise a system to deal with the
growing problem of piracy in the South East Asia region. The move follows a
recent survey by the charity of 87 Japanese shipowners which showed that
pirates had attacked 66 Japanese vessels in South East Asia & Africa in
the last 5 years. The foundation is particularly concerned that crews had
been murdered during the course of some recent ship hijackings.
- Mexican Pirates Attack! .............. as brandishing
grenades & firing assault rifles into the night air, a half-dozen hooded
pirates attacked the ferry M/V Mexico I returning from the Caribbean resort
isle of Cozumel on 1 June. They robbed passengers of money & valuables,
threw 2 guards overboard and beat a crew member before speeding off in
another boat. One of the security guards, who were transporting a cash
transfer, was rescued by the navy, but the other is still missing. The
ferry's engineer was hospitalized with serious head injuries. Foreign
tourists make up most of the ferry's 253 passengers. The coves & lagoons
of Mexico's Caribbean coast were a favorite hunting and hiding ground for
pirates during the 1600s, but few sea robberies have been recorded since
- Thai Pirates Attack! ........... as armed pirates in
speedboats hijacked the Thai tanker M/T Siam Xanxai and set 16 of its crew
members adrift in a faulty motorboat. The latest case of high-sea piracy in
the busy Southeast Asian waters occurred June 8, said Int'l Maritime Bureau.
The tanker was carrying 2,060 tons of gas oil, a fuel used by boats and
ships, when it disappeared off the Malaysian resort island of Tioman close
to midnight on the day it sailed for the Thai port of Songkhla. The 12
pirates bound the boat's crew & imprisoned them in two of the ship's
cabins for 2 days. They then ordered them overboard where drifted in the
faulty motorboat for 14 hours before being rescued by a passing vessel.
Small tankers carrying gas oil have become increasingly vulnerable in recent
years since the cargo is easy to sell to villagers who use motorized fishing
boats. Using forged papers, pirates often sell the stolen ships. The Thai
Foreign Ministry said the vessel had been taken toward Chinese waters.
Earlier this year, the Int'l Piracy Center, a division of the Maritime
Bureau, released a report accusing China of giving pirates shelter, refusing
to arrest or prosecute them & keeping the ships the pirates brought into
Chinese ports. The Chinese government has denied the charges. In 1998, 15
ships were hijacked in the region.
- Stowaways Die ............. as 6 Dominican stowaways were
killed while hoping to reach the U.S. died aboard the Panamanian-registered
M/V Aurora Jade. Officials have detained its crew, the U.S. reported on 12
June. The crew discovered 22 stowaways in the hold between Santo Domingo
& New Orleans. The report quoted 23-year-old Israel Mercedes as saying
that 6 in the group died after a substance, possibly a fumigant, was sprayed
into the hold, which was carrying rolls of cable. Mercedes said he believed
the crew wanted to kill them. He said the substance made the stowaways cough
& vomit. Captain Eusebio Panopio turned his vessel around & returned
to Santo Domingo under escort.
- FMC Lifts Japan Sanctions ......... as Tokyo moves to
promote port reform. The U.S. Federal Maritime Commission said it would drop
the sanctions as they were outdated, particularly in light of the changing
economic environment in Japan. Instead, the Japanese flag-carriers and U.S.
lines APL & Sea-Land will submit biannual reports outlining Japan's
efforts to reform its ports' rules & procedures. U.S. flag lines had
complained for years that Japanese port rules allegedly discriminated
against non-Japanese carriers, particularly a "prior consultation"
requirement which forced carrier to negotiate every operational change they
wanted to make.
- Next Harbor Maintenance Tax Battle Looms .......... as
the American Assn. of Ports Authorities (AAPA) has strongly opposed the
next, proposed U.S. harbor usage fee which would tax vessels according to
their size, and not according to the value of goods carried. The U.S. hopes
to raise US$1B with the new tax, which it said will go towards harbor
maintenance projects. The AAPA said that U.S. Customs revenue is already 31
times the budget needed for annual harbor dredging work. The harbor
maintenance tax is roundly opposed by the industry & many legislators,
who argue it is an unfair burden on the industry.
- 1998 Top Ten Fleets ............. as Lloyd's Register's
World Fleet Statistics for 1998 lists its annual top 10 list of merchant
fleets as: Panama (98.2 million gross tons); Liberia (60.5 million GT);
Bahamas (27.7 million GT); Greece (25.2 million GT); Malta (24.1 million
GT); Cyprus (23.3 million GT); Singapore (20.4 million GT); Norway (19.9
million GT); Japan (17.8 million GT); and China (16.5 million GT).
- New Shipper Clout Group .......... as the Fashion
Accessories Shippers' Assn. & the Food Shippers Assn. of North America,
have formed "Gemini Shippers." The shipping associations merged
primarily to give them more leverage with carriers, who are going through
fundamental shifts in pricing policy with the introduction of the
Transpacific Stabilization Act (TSA). Industry insiders have indicated that
the shipping industry is concerned about a recently proposed rate rise of
US$900 per FEU for eastbound, Pacific trade. The shippers are very aware
that recent deregulation under the Ocean Shipping Reform Act will bring
cheaper rates to the large shipping organizations and then make up any lost
revenue by increasing rates for the smaller shippers. Gemini will produce
about 50,000 FEUs annually.
- Port of Long Beach Smiling ............ as exports
rebounded to their highest level in more than a year in March, while imports
were slowed by early Easter & Chinese new year holidays. As a result,
the number of cargo containers shipped through Long Beach climbed to the
equivalent of 347,974 TEU containers in March, a 4.4% increase over March
1998. Inbound containers increased 2.5% to 171,913 TEU, compared with March
1998. Imports, including clothing & shoes earmarked for Easter &
spring sales, had jumped 30.6% in February 1998. For the first 3 months of
the year, imports were up 15.6% from the same period a year ago. The 2.5%
increase in March was the weakest since December 1995. The number of
outbound containers was 88,699 TEU in March, a 2% increase over march 1998
but a nearly 11% gain over this February. While virtually unchanged from a
year ago, March's export total was the highest for the port since December
1997 - another sign that Asia's economic slump may be ending. Sadly for the
U.S., leading exports have been raw materials including wastepaper &
scrap metal, not finished goods.
- MSC Did Not Get A Gold Retirement Watch ........... as
Mediterranean Shipping Company (MSC) has dropped out of the Transpacific
Stabilization Agreement (TSA) after serving as member for less than a month.
The TSA, which sets pricing guidelines for its 14 carrier members, brought
the MSC into its group after it began an Asia/North America service this
year. One of the first and last acts of MSC within TSA was its recent
attendance at the TSA presidents' meeting. Four days later, MSC told the FMC
that it was leaving the TSA. TSA continues to function with core members:
Yangming Marine Transport, Maersk, P&O Nedlloyd, Mitsui OSK, Evergreen,
APL, Cosco, NYK, OOCL, Hyundai, Sea-Land, K Line, Hanjin & Hapag-Lloyd.
- Sea-Land Services Down ........ as 1st quarter 1999 shows
a 2% decline in operating income, to US$12M. Pressure on Atlantic container
shipping rates was the principal cause for the drop. Atlantic rates per
container were down 12% to US$2,078, compared with a worldwide drop of 3% to
$2,170. Atlantic revenue declined by 16% to US$173M. However, a good 1st
quarter on the Pacific boosted total revenue by 2%, to US$973M.
- NOL Needs A Boost ........ as heavily-indebted Singapore
based Neptune Orient Lines (NOL) is to raise US$500M through stock
offerings. Newly appointed CEO Flemming Jacobs plans to use two thirds of
the cash raised to reduce NOL's US$2.7B debt. Meanwhile rumors continue that
APL could be offered for sale.
- Hard To See A Box Trend .......... as NYK reported that
it ordered twice as many containers, in TEU terms, for 1999 than it did for
1998. NYK said that will lease containers of an equivalent 36,900 TEU for
fiscal 1999. This compares with the 18,000 TEU it leased in 1998. However, K
Line said it is leasing 7% less TEU for fiscal 1999, 13,900 TEU from a
Chinese maker, a drop from its the 15,000 TEU that it leased during fiscal
- Container Ship Market Continues Decline .............. as
depressed containership sale & purchase market is forecast to decline
further this year as the disparity between price and vessel earning
potential widens according to Clarkson's latest Shipping Review &
Outlook. Very few containerships have changed hands. Between Sept. 1998
& March 1999, only 29 vessels of 17,171 TEU were reported sold. Some 55
vessels, totaling 85,551 TEU, were sold for demolition last year. The
exception seems to be container vessels of 2,000-3,000 TEU range which are
being snapped up for new services particularly to ports in Europe &
North America for carriers such as Mediterranean Shipping Co., China
Shipping & Zim Israel.
- FastShip Now Contracts The Vessels ........... as last
months announcement of port contracts has new been followed by a preliminary
agreement with National Steel & Shipbuilding Co. to build the first 4
cargo vessels of a 9 ship fleet that FastShip says will make Trans-Atlantic
journeys in half the time that conventional ships do. FastShip remains on
track for a 2003 target date to make its first high-speed runs between
Philadelphia & Cherbourg, France. The Philadelphia-based company's ships
will use 5 modified jet aircraft engines powering water jets instead of
conventional propellers. A patented hull shape also helps speed up the
journey. FastShip says Philadelphia is the ideal North American hub because
60% of the U.S. gross national product is generated within 350 miles of the
Philadelphia port, less than a day's journey by truck or rail. Air shipments
cost 10 times more than conventional ocean freight, but company's rates are
expected to be closer to conventional sea cargo rates than to air rates.
- Madrigal Line Merger? .......... as Trans-Pacific Lines
of Taiwan continues ponder to merger with Philippines-based Madrigal Pacific
Carriers. The 2 carriers already collaborate on a Pacific trade liner
service. Trans-Pacific has links with intra-Asia carrier Wan Hai, while
Madrigal carried the name Madrigal-Wan Hai in the past.
- CSAV Continues Buying ......... as Compania Sud-Americana
de Vapores (CSAV) has maintained its recent rapid growth in pan-American
east coast trade with the acquisition of the Uruguayan carrier, Montemar.
The move follows the Chilean carrier's purchase of Libra & Euroatlantic
Container Line, and its establishment of "BrazTrans" in Brazil.
Montemar's container service routes will supplement those of CSAV along the
eastern seaboards of the Americas and to northern Europe. Montemar operates
its eastern seaboard trade under the name of Pan-American Independent Line.
- Meet M/V Soroe Maersk .......... as Maersk has added
another vessel to its fleet of 6,600 TEU ships. The carrier has ordered 9
ships of this capacity, the "S-class" class. Soroe Maersk, marks
the 8th vessel delivered of out of the 9 vessel order. The company said it
will focus use of these vessels on its USWC/Asia/northern Europe services.
- "K" Line's New "E Line" ......... as
it has launched Global Tracking capability through the Internet, with
real-time cargo status information through a search of bill of lading or
container numbers. A search by North American booking number will be added
- Will They Cut Windows In The Forty Footers? .......... as
Taiwan's Evergreen Line has confirmed that it is considering setting up
cruise shipping activities. The group is already involved in the airline
industry (EVA Air) and in hotels, and owns a container manufacturing
business and a shipyard.
- Panama Passing Zone Ahead .......... as two Panamax
vessels passed each other at the famous Gaillard Cut, in the Bas Obispo
reach of the Panama Canal this month, the 1st instance of Panamax ships in
two-way traffic on the Canal. The passage is a major step forward in
attempts to boost the Canal's capacity. A canal-widening project, scheduled
for completion in 2002, has identified selected reaches of the Canal for
widening from the current 500 feet to 630 feet on straight reaches, and up
to 730 feet at curves. These steps take on special importance as neighbor
countries continue to ponder the prospect of their own canal alternatives.
The Panama Canal Pilots Association has been participating in tests to
determine safe points along the canal where vessels may pass.
- Miami Vice ............ as the Port of Miami will
establish a not-for-profit private corporation to manage it's container
cranes. Port Director Charles Towsley said the new agreement would save the
port US$4.5M over the next 10 years in management fees & sales tax
savings. The new company would be a permanent replacement for "Fiscal
Operations," a unit which had set up financing and operated the cranes
since 1982. An interim company is operating the cranes until the new company
can be set up. Principals in "Fiscal Operations" and former port
director Carmen Lunetta had been accused of funneling money from the company
and using it for campaign donations and personal uses. A U.S. district judge
recently acquitted Lunetta, Calvin Grigsby and Neal Harrington, though
stating that there was "substantial evidence of greed & public
- Dutch Customs "Eyes" Containers ........... as
a container scan device has detected more than US$6M of contraband in its
1st 2 months of use at Rotterdam. In this trial period the device spotted,
among other things, 53 million cigarettes and 4,500 gallons of vodka.
Customs officials use the scanner to view the contents of a container on a
computer screen. Customs officials see what merchandise is stored in the
containers by examining the contours & colors of the computer readout,
which reveals concealed spaces which could contain contraband.
- East Asia Ports & Shipping Conference 23-24 June, 1999
........... as the Hong Kong event will featuring leading ports &
shipping experts from the Hong Kong Port & Maritime Board, P&O
Ports, Kaohshiung Harbor Bureau, Port & Harbor Bureau, City of Yokohama
and many more, with insights into key issues concerning the port
authorities, ship owners, project developers, users of port and shipping
facilities in the next millennium. For further details E-mail: firstname.lastname@example.org
- Throughput. Bearing mind that Long Beach is the larger
port next door, the Port of Los Angeles established a new cargo volume
record in May, with a total of 335,960 TEU. Antwerp has experienced an
increase in throughput for the 1st quarter, with container traffic was up 5%
at 249,482 outbound, and inbound container also up 5% at 202,581. Shipping
hub Le Havre saw an inbound/outbound container volume of almost half a
million TEU for the first 4 months of 1999, a 5% rise in container
throughput from same period 1998.
- This Month in U.S. Navy History ........ as on June 4,
1942 the Battle of Midway began. The U.S. victory over the Japanese navy
proved to be the turning point in the Pacific war. On June 10, 1854, the 1st
formal graduation exercise was held at the Naval Academy.
Here are our suggested world wide web sites of the week for your business,
your information and your amusement ...............
Technology News .......... from the Journal of Commerce. Tech
Center provides logistics and transportation professionals with software reviews
and demos, articles from Traffic World & Air Cargo World, links to related
web sites, and a guide to software automating the supply chain from Enterprise
Resource Planning to Transportation Support Systems.
Directory .......... with 39 sections indexed by provinces &
& Euro Freight News
DHL Hong Kong .........
1st bilingual website for the air express industry for local users. Linked with
a large UNIX database, the website allows customers to arrange packages such as
finished goods or arrange just-in-time delivery.
Jobs At Sea Sites
America's Shipyards: Progress, Challenges, Opportunities ........
the event will take place July 29-30, 1999, at the Hyatt Regency, Crystal City,
in Arlington, Virginia.
ABF Freight System's
"eCenter" ............ with tools such as "Advanced
Reports," & "Freight Bill Review."
American Freightways Corp.
........... with shipment notification that gives customers the ability to
schedule automatic notification when shipments reach a predetermined status,
such as pickup, delivery, etc. and customized reports
McAlpin Logistics Team
........ assists U.S. tuckers in minimizing dead-head & empty mileage
.......... U.S. FTL & LTL cargo finder with 24 hour posting.
American Forces Information
Service: "Confronting Y2K."............. the site is
accessible from the front page of DefenseLINK.
......... get the new report.
........... a web based platform to ensure secure, confirmed delivery of
messages, newsletters, & documents online. The service offers e-mail &
document delivery with universal receipt confirmation, regardless of size,
origin, or destination. The basic service is free. Message recipients are
automatically provided with membership and receive full access to their personal
mailbox upon visiting the site to pick up their mail.
......... Extended Supply Chain Software Shipping Solutions.
competes in the online delivery market along with Tumbleweed Software, UPS
Document Exchange, docSpace, & Pitney Bowes. The company focuses on directly
delivering any type of data straight to the desktop.
"World's Easiest Print
Center" ......... is the name of a new Internet service which
aims to meet printing needs for your business. They promise turnaround times of
approximately 3-10 days.
Mingtai Fire & marine Insurance v. United Parcel Service
No. 98-15088 (05/25/99)
International Law of Air Cargo
Holding: The 9th Circuit held the Warsaw Convention does not apply to the lost
cargo in this case.
Case Facts: The question presented before the 9th Circuit was whether the
Warsaw Convention in the People's Republic of China binds Taiwan (the Republic
of China) which did not sign the convention. Appellant Mingai insured microchips
sent from Taiwan to San Jose, Calif. under an UPS AWB. The chips were lost.
Mingtai alleged that the lost package contained computer chips worth $83,454.80
and brought suit against UPS in the Northern District of California alleging,
inter alia, loss of cargo under the Warsaw Convention. UPS answered that the
Convention did not apply, and that its air carrier liability was therefore
limited to the US$100 released value provided by the air waybill. The district
held that Taiwan, which is not a signatory to the Convention, was not bound by
the People's Republic of China's ("China") adherence to the
Convention. The district court therefore upheld the limitation on liability
provided by the air waybill, and entered summary judgment in Mingtai's favor in
the amount of US$100. The parties did not dispute that Taiwan is not a High
Contracting Party, nor that China is a High Contracting Party. Thus, the sole
question presented was whether China's status as a High Contracting Party is
sufficient to bind Taiwan to the terms of the Convention.
The 9th Circuit held this it will not recognize Taiwan as a party to any
treaty signed by China even though the U.S. does as a political matter.
NOTE: The U.S. recognizes Taiwan as a party to the treaty as a political
matter, but the 9th Circuit Court does not for court purposes. The result is
that contract terms of the AWB apply. This is interesting because the Law
Offices of Countryman & McDaniel recently participated in a case before the
Taiwan District Court, making the argument that Taiwan itself DOES honor the
Warsaw Convention. The Taiwan Court agreed. Read the entire decision: http://laws.findlaw.com/9th/9815088
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