The Cargo Letter

THE CARGO LETTER [343]
Air & Ocean Freight Forwarder - Customs Broker News
18 August 1999

Good Wednesday 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''.

This month we are celebrating the 40th anniversary of the Sister City/Sister Port relationship between Los Angeles & Nagoya, Japan, which was the 1st such affiliation for our City of L.A. This month we also bring back "Cargo Damage Dispatches", your favorite feature, in Part 2 ! And yes, we have lots of PIRATE news this month, in Part 2 ! How many must die before the world takes this problem seriously? McD

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, logistics/cutoms attorneys at LAX.

INDEX to The Cargo Letter:

OUR Top Story
   1. Our Girl Braves The Storm
      * Kim Comes Home
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
   6. The Cargo Letter Cargo Damage Dispatches
      * Back By Popular Demand
OUR "D" Section: FF in Cyberspace
   7. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
   8. Changes To The IATA Air Waybill After MP4?
      * We Asked IATA
   9. Technology Key To Year 2000 Air Vision
      * IATA Eyes The Future

OUR Top Story

1. Our Girl Braves The Storm

• Kim Comes Home

18 Aug. - LAX -- There are no words to express our thanks for the giant hearts which each of YOU opened on 17 July 1999 for our dear Kimberlee Countryman. From across America, to the major cities of the world, to the Pyramids of Egypt, to the tundra of North Canada, to South America, to the wilds of South Africa, to Eastern Europe, to remote Pacific Islands, and to way Down Under .............. there has been an outpouring of love & hope by thousands of YOU for our dear 16 year old Calabasas High School cheer leader who faced & beat the odds! Liver cancer at age 16, and a father who would not wait for his daughter to just come up on a hospital transplant list in L.A.. Byron searched the country, fighting to save Kimberlee's life, and did.

We cheer Byron E. Countryman, Esq. of our Countryman & McDaniel law firm as a remarkable father & a true life hero. We cheer Kim's true courage & pray for her bright new future. Go Kim!

Thousands of YOU responded with hope for Kim from around the world. YOU helped save our dear girl! YOU comforted our girl by E-mail in dark times. We have no words.

St. Luke's Hospital at Jacksonville, FL, has given Kimberlee a clean bill tonite. The liver transplant was flawless. Our Kim may be home this Saturday, after 2 months, so very far from home. Kim was just elected "Head Cheerleader" at her high school! A miracle! Bravo! Full details next month, including the rather incredible tale of a South African horse, now named "Kimberlee". Tears & thanks. McD

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

2. Freight Forwarder Trade Briefs

Special Note: Our Internet service www.CargoLaw.com will be down from 20 through 24 August because the Internic must renumber the server addresses.

• Roadway Express Selects Our "TRANS-CAMS" ........... as the leading U.S. motor carrier selected our Internet feature of live transportation cameras as No. 1 on it's "Top Ten" list for the month of July 1999. Many new features have been added to our "TRANS-CAMS" feature including over 200 cameras, live air traffic control radio, short wave radio, live satellite images & ocean monitor buoys. Where will you go today? Thanks Roadway, voted No. 1 carrier by Pier One Imports this month! http://www.roadway.com/president/archive/tt9907.html
• U.S. Forwarders Eye Possible Big Break .............. as the U.S. Small Business Administration (SBA) has issued proposed rules for when to classify a freight transportation company as a small business. The agency says it wants to reduce its current classification threshold between large & small businesses in the cargo industry from US$18.5M to US$5M. The SBA's proposed rules would also give brokers, forwarders & NVOCCs the ability to exclude "pass-through" funds on gross receipts. Pass-through funds include a variety of industry services, such as insurance, packing & inland transportation. A "small business" status allows firms to participate in many government contracting programs and exempts them from some regulations. It may also result in preferential state tax treatment. Travel & real estate agents have enjoyed these privileges since 1989. The National Customs Brokers & Forwarders Assn. of America says it wants similar treatment from the SBA.
• Big Brown To Get More Green ......... as 92-year-old United Parcel Service said it is going public. The company will sell off 10% of its approximately 546 million shares in an initial public offering by the end of 1999. The decision to go public is a dramatic one for the very private UPS. Although the company is in no need of cash, it's seeking new flexibility to make new acquisitions, growing is business accordingly. The move is seen to raise $3B. Last year, the Atlanta-based UPS earned US$1.7B, an increase of 92% from US$909M in 1997 when UPS endured a crippling strike by the Teamsters union. Revenues last year totaled US$24.8B, up 10% from US$22.5B in 1997.
• But ...... UPS In Historic Tax Jam ......... as the U.S. Tax Court in Washington has ruled that United Parcel Service must pay back taxes of up to US$200M because of "negligence or intentional disregard" of tax rules in reporting income in the early 1980s. The court sustained an earlier finding by the Internal Revenue Service (IRS) alleging that systematic under-reporting of income from a Bermuda-based subsidiary, Overseas Partners, between 1983 & 1984 amounted to US$67M in unpaid taxes. UPS was found liable for taxes, penalties & interest for deductions it took related to the income of Overseas Partners Ltd., now an independent company that provides "excess value" insurance for certain packages. UPS appealed the original IRS ruling. The company said the judgment by the US Tax Court could push its outstanding tax bill to US$200M when interest & penalties are included. UPS said it believes there are grounds to appeal the ruling and is considering legal options. UPS might owe about US$260M more in taxes alone to the IRS for tax years through 1990 & maybe even much more. On 16 August UPS said that will set aside US$1.44B, creating a net loss for its 2nd quarter, as a result of a judge's ruling that it was illegally using offshore companies as tax shelters. Wow! The move announced on 16 Aug. could set the stage for the Atlanta-based shipping giant to pay the tax bill as a way to stop interest from accruing while UPS appeals the decision or tries to negotiate a settlement.
• Y2K Update ......... as about half of 161 countries examined by the U.S. State Department are believed to face a medium to high risk of experiencing failures in their telecommunications, energy & or transportation sectors because of Year 2000 computer glitches. Industrialized countries were generally found to be at low risk of having Y2K-related infrastructure failures, particularly in the finance sector. Still nearly a third of these (11 of 39) were reported to be at medium risk of failure in the transportation sector, and almost one-fourth (9 of 39) were reported to be at a medium or high risk of failure in the telecommunications, energy or water sectors. The U.S. FAA has announced that all of its computer systems are now fully year 2000 compliant.
• Show Me The (German) Money! ......... as the European Union is expected open an investigation into the German government's role in funding Deutsche Post's parcel business. The new investigation stems from complaints made by United Parcel Service & other express carriers operating in Europe. The carriers say Deutsche Post has used revenue from its monopoly letter delivery business in Germany to finance its US$3B global acquisition spree. A Deutsche Post spokesman said EU regulators plan to send an official notice to the German government announcing the investigation, which will focus on the government's dealings with Deutsche Post. The EU has already ruled that sufficient evidence does not exist to launch an investigation against the postal company itself. UPS has petitioned the EU to investigate cross-subsidization at the German post office since 1994. In May, UPS asked U.S. justice officials to force the EU to take action under an international anticompetition agreement signed by the U.S. and the European Communities in 1998. Deutsche Post denied there has been any cross-subsidization by the German government since the postal company was partially privatized 4 years ago.
• Taiwan Back On Track ........... as exports to the rest of Asia grew 21% in Jan. '99 compared to same period '98, defying the 18 month trend which had showed consistent decline. But Taiwan's Directorate General of Budget, Accounting & Statistics warned that full year growth this year is unlikely to be more than 4.74%. Despite this gloomy forecast, total exports soared 28.8% to US$9.8B in Jan. The better indicator, imports similarly rose by 24.1% to $9.28B year-on-year. Where China is concerned, In the first 5 months of the year, indirect trade between Taiwan & the mainland rose 7.5% to US$9.85B from the year earlier period.
• But, Korea's Daewoo Must Sell To Survive ............. as the giant conglomerate is to sell 20 of its 22 affiliates, including its shipbuilding concerns, as part of a huge restructuring program designed to pay off a massive US$50B debt. The company, which has already put up US$8.3B in collateral to stave off banks calling for loans to be repaid, will use the proceeds from the fire sale to support Daewoo Corp and Daewoo Motors. These 2 companies will be all that remain of a vast enterprise with assets of over US$60B. There are already press reports in South Korea that the group's giant Okpo shipyard will be sold within the next 2 weeks to either Mitsui or Kawasaki.
• PRC Punishes Prices ............ as after 21 months of deflation, China has issued new rules with tougher punishments for businesses that fail to follow government pricing policies. The regulations, drafted by the government's State Development Planning Commission, specify fines and punishment for various price violations. They also list punitive measures for the charging of unauthorized fees, according to the official Xinhua News Agency. Faced with overcapacity & market gluts, China's manufacturers have recently slashed prices or, in some cases, forged alliances with competitors to keep prices aloft. China's existing price law made low-price dumping, price fraud and price monopolies illegal. Nonetheless, many of China's industries - from televisions to computers and through a range of home appliances - are fighting price wars. Sinking steel prices forced the government to impose price limits.
• New U.S. Export Act Approaches ........ as The U.S. Senate Banking Committee has issued its staff draft of the revised Export Administration Act. During the past 2 months, the Committee has held meetings with the Clinton Administration & industry officials to revise the export control legislation. The Export Administration Act lapsed in 1994, and its provisions have since been continued by executive order. The staff draft calls for multi-agency review of export license applications. The proposed penalty will be 10 times the value of the export, or a maximum of US$1M for individuals or US$10M for corporations. There will likely be one more draft of the legislation before the Committee votes on it in September.
• FedEx Buys A Forwarder ............as its 1st purchase since the merger of Federal Express & Caliber System two years ago, FCX Corp. has purchased GeoLogistics Air Services, a small but profitable unit of GeoLogistics. The unit will become Caribbean Transport Services once the US$116M sale is finalized in the next few months. The freight forwarder, specializing in heavy freight transport of medical & technical equipment and pharmaceuticals between Puerto Rico and the U.S., will operate under the FDX Global Logistics umbrella along with Caliber Logistics. The purchase is the 1st step to expand Caliber's reach beyond the U.S. Europe.
• AEI Frets Over Purchase ........ as forwarder Air Express Int'l has purchased Team Fret, a small French ocean freight forwarder, on terms not disclosed. Headquartered in Marseilles, Team Fret operates mainly on routes between southern France, the U.S. & the Far East.
• ASG Changes Partner ......... as its partner network is now with Danzas. In the road transport sector, the shift will be effected as of Sept. 2 in all markets and will be implemented gradually during the autumn in the air & sea sector. The Danzas group, which is part of Deutsche Post, finally acquired a majority stake in ASG. Danzas won the struggle for ASG from Swedish national postal company Posten AB. Late reports are that several managers have resigned their posts at ASG AB since Deutsche Post Group subsidiary Danzas won majority control of the Swedish forwarder this month, European sources say.
• USF Worldwide Buys In Puerto Rico ......... as the freight forwarding subsidiary of US Freightways, has acquired Best Ways Air Cargo, a Puerto Rico-based airfreight forwarder. The purchase marks continued expansion of USF's presence in the air forwarding market, which began last year with the purchase of Seko Worldwide. USF bought Texas-based int'l air forwarder Golden Eagle Group in Nov. U.S. less-than -truckload carriers (LTL), including Yellow Corp., Consolidated Freightways & Roadway Express, are pushing into the air forwarding market to capture more higher-yield, time-definite shipping business.
• Consolidated Freightways Partners In Italy ........ as the LTL carrier has an alliance with Italian transport company, Merzario S.p.A. Merzario is an Int'l freight forwarder headquartered in Milan.
• UPS Operations Are Finally Legal ........... as the new "UPS Document Exchange Invoices" is the first service of its kind for law firms & corporate legal departments to share digital invoices in a standard format. UPS Document Exchange Invoices enables law firms & corporate legal departments to share sensitive invoices securely over the Internet or a private network in a standard format. It differentiates & translates invoice information sent in the multiple formats inherent in proprietary billing systems. All major legal industry formats are supported.
• Fritz Engineers ......... as Graham R. F. Napier has been named to the newly created position of Ex. V.P., engineering for Fritz Cos. He assumes responsibility for the SFO based forwarder's worldwide engineering activities & acquisitions. Prior to joining Fritz, he was V.P. & GM, strategic business development and supply chain services at AlliedSignal. Aerospace. Previously he spent 5 years at Ryder Integrated Logistics in No. America & Europe, serving as GM/Int'l & director of account management. Fritz continues is brain trust acquisition industry move.
• Expeditors Founds A True Outpost ......... as Expeditors Int'l of Washington has opened a multimodal logistics facility in Port Louis on the island nation of Mauritius. Expeditors will use the facility in Mauritius's capital to serve garment trade with the U.S. & Europe.
• BAX Global Takes The Thai Ground .......... as it has added a company-owned operation in Thailand. Based in Bangkok, the new operation provides air & ocean services, brokerage & warehousing. BAX Global has operated in Thailand since 1984 through a local agent.
• Union Transport Buys Dutch .......... as the air & ocean freight forwarder has acquired Sea-Air Transport of Rotterdam. With a staff of 25 people and offices in Amsterdam-Schiphol Airport & Rotterdam Sea-Air Transport has a strong customer base of Netherlands-based Asian importers, but has been actively seeking an association with a global network.
• ABF & Roadway Take A Next "E-Step" To Bond With Shippers ........ as the national motor carriers have simultaneously announced the release of "myRoadway" and "myABF", allowing customers to create personalized web pages. Customers can manage the wide variety of transportation tools & shipment information available via ABF's eCenter in combination with other Internet content such as stock quotes, weather reports & links to virtually any Internet destination. Users quickly create and format their own personal web pages.
  http://my.roadway.com
  http://www.abfs.com or
  http://www.myabf.com
• EU Motor Cargo Ecliped .......... as 3 big Belgian crossings on the French border were closed to all traffic on 11 Aug. because of travelers on their way to the total solar eclipse in a narrow strip of Central Europe. Also in the south of Germany huge jams developed. This was the result of scores of miles of total gridlock. The traffic flow got under way fairly late because in the early morning of August 11, 1999 the skies in Europe were heavily overcast. Many truckers were able to enjoy the eclipse at rest, since in major parts of Europe a driving prohibition had been imposed, often halting of all traffic.
• High Speed Amtrack .......... as on a remote, brush-covered prairie in Colorado, what has been billed the fastest train in the U.S. is being put to the test. The sleek, bullet-nosed train flashes through the landscape of sagebrush & sunflowers. Eventually it will reach 150 mph, with the capability to go even faster. ``We had it up to 167 mph a couple weeks ago,'' Ernie Chance, Amtrak's assistant chief mechanic officer, said. ``And it felt like she still had more power in her.'' It's one of 20 high-speed electric trains named "Acelas" that Amtrak is building as part of a US$2B project. The Acelas, unveiled in March, will be used along routes connecting Boston, New York & Washington, with the 1st passenger runs scheduled for Nov. or Dec. But for now, one of the electric-powered trains is running in circles - lots of them. It is being tested for up to 16 hours a day on a 13-mile track at the Transportation Technology Center, which sprawls across 52 square miles of land about 25 miles N.E. of Pueblo. The center is a subsidiary of the Assn. of American Railroads, representing No. American freight railroads & Amtrak.
• CSX & Norfolk Southern Cross Fingers. .......... as the 2 railroads that embarked 2 months ago on an ambitious journey to break up Conrail's freight monopoly are only now beginning to dig out of the logistical and operational quagmire their takeovers caused. Computer coding errors & other setbacks have led to congestion and shipping delays since early June. Manufacturers unable to get raw materials or send out finished goods have incurred expenses that may be passed on to their customers. Neither railroad is willing to declare victory yet, particularly with pre-Christmas traffic expected to pose additional problems this fall, but CSX & Norfolk Southern believe the worst is behind them. Shippers seem to agree. But the setbacks have been costly: Driven partly by recovery expenses, CSX reported last week that 2nd-quarter earnings dropped 25%, while Norfolk Southern says that earnings went down 59% from the same period last year. The railroads have had to hire more crews, lease additional locomotives and run special trains for time-sensitive shipments.
• Sea Containers Ltd. Heads For The Hills.......... as the lessor of ocean containers has announced that a group of investors led by it had won the tender to acquire Enafer, the Peruvian State Railways. Enafer is composed of 3 non-connecting rail systems: the Central Line between the port of Callao and the high Andes, the Southern Line between the ports of Matarani & Mollendo and the city of Arequipa, continuing to the high Andes cities of Puno on Lake Titicaca & Cusco, the former Inca capital and main tourist destination, and the narrow gauge Machu Picchu Line between Cusco & Machu Picchu. In related news, word remains pending that Burger King will enter the atomic bomb business next month.
• Indian Cargo, A Day Time Activity ......... as authorities suspended the movement of trains at night through northeastern India as insurgents stepped up attacks on the road and rail links to the isolated region. Railway authorities imposed the night ban after rebels recently derailed a freight train and damaged tracks with explosives. Tribal & ethnic rebels have been blamed for an escalation of attacks on the communications links in the narrow strip of land in Assam that connects the Northeast with the rest of India. No one has claimed responsibility for the attacks.
• From2.com Has The Info ........... as the MIA based E-Commerce logistics company, has announced it's patent-pending Global Delivered Cost Calculator for use by the trade. The customers of users will be able to obtain all-inclusive price & delivery quotes instantaneously at the point of purchase. In addition to freight and insurance, the quotes include duties, taxes, customs clearance fees & other import charges associated with shipping any product to any Int'l destination. http://www.From2.com
• U.S. & U.K. Customs Link .......... as the 2 say they are ready to move forward with efforts to electronically share Int'l trade data. The system, the Int'l Trade Prototype (ITP), has been in development since 1996. The goal of the system is to send one set of shipment data to satisfy import and export requirements of both countries. Four trade participants were approved to test phase one of the prototype: General Motors, Philips, Xerox & Hewlett-Packard. In this next phase, the U.S. will engage in releasing cargo through ITP. The system, a stand alone, prototype system for U.S. Customs, is expected be rolled into the agency's new umbrella system, the Automated Commercial Environment.
• Final Rules For AES ........... as U.S. Customs & the Bureau of the Census have announced the final rules to support implementation of the Automated Export System (AES). AES is a nationwide system that enables exporters to submit required export data to the government electronically. The 30-year-old Automated Export Reporting System (AERP) is scheduled to be turned off Dec. 31. AERP filers that are not on AES by the end of the year will be forced to revert to paper filing of export declarations on Jan. 1. Under the new rules, exporters will have 4 options to file their export declarations:
  • Option 1: File all export declarations on paper prior to export.
  • Option 2: File all shipment data prior to export through AES.
  • Option 3: Require that some data be filed prior to export, with the full information to be filed 5 days after export.
  • Option 4: Permit Census-approved exporters to file all their export data 10 days after export. Forwarders may filed export declarations under this option for approved shippers, if they have a power of attorney.
• Census Web Site for Downloading SED ........ as the Census Bureau has posted to its Web site the Shipper's Export Declaration (SED), form 7525-V. Forms 7525-V-Alt (Intermodal SED) and 7513 (SED for In-Transit Goods) are expected to be made available on this Web site in the near future. Forms can either be (a) filled out using a Web browser and/or Adobe Acrobat & then printed on a local printer, or (b) downloaded & printed. Of course the document should be printed on buff or goldenrod colored paper. http://www.census.gov/ foreign-trade/regulations/forms
• Updated List of AES Participants ......as the Census Bureau has posted to its Web site a list of participants in the Automated Export System (AES) as of August 2, 1999. There are now 168 freight forwarders, 31 exporters, and 2 ocean carriers in AES production transmitting commodity information into AES for 25,510 unique exporting companies or individuals. In addition, the list indicates that there are now 34 service providers with certified AES software/programming. http://www.census.gov/ foreign-trade/aes/aesparticipants.html
• Your New Home Will Be Under Quota ........ as U.S. Customs will reclassify 2 more lumber products, formerly exempted from the U.S.-Canada Softwood Lumber Agreement (SLA). This will further escalate the cost of homes as new the tariffs are passed on to U.S. homebuyers & other consumers, according to American Consumers for Affordable Homes (ACAH). The SLA was signed in 1996 between the U.S. & Canada to give a 5 year truce in the battles over lumber products between the two countries. Customs announced last May it would reclassify rougher headed lumber & notched studs, forcing them into the current quotas which control the amount of softwood lumber Canada can sell to the U.S. The 2 products had been exempt from the quota, and the reclassification will mean that duties will now have to be paid on the products or those products will be shipped in lieu of other products covered in the original agreement. Customs delayed implementation in May after several members of Congress expressed concern about the impact of the decision, but despite continued opposition moved ahead on the reclassifications. The move is estimated to add US$2,000 to US$2,500 to average home purchases. It is estimated that over the life of a mortgage for a US$40,000 manufactured home, the reclassifications and agreement could add up to US$7,000 more. Thanks.
• Judging Customs .......... as the U.S. Customs Service has changed its policy of over 200 years and says it will obtain the approval of a federal magistrate when it wants to hold a passenger for more than 4 hours who is suspected of smuggling drugs. The policy change will take effect Oct. 1, says Customs Commissioner Raymond Kelly. In general, Customs can now detain passengers for any period of time without having to go to a federal judge for approval. But Customs will now be required to make a case before a federal judge showing that it has ``reasonable suspicion'' to keep the passenger in custody. Customs would have to go to the magistrate after a person has been held for 4 hours or more. If the judge deems that there isn't reasonable suspicion to hold the passenger, he or she is released. If the judge determines there is reasonable suspicion, then Customs can continue to hold a passenger, and, following appropriate procedures, can subject them to more advanced body searches, such as a medically supervised X-ray at a hospital or a monitored bowel movement. Customs officers use searches to try to catch smugglers who hide cocaine or heroin inside their clothes or swallow packets of drugs. The searches usually begin with a pat-down and, with reasonable suspicion, can proceed to a strip search, X-ray or monitored bowel movement. The agency is facing numerous lawsuits over body searches, 1st reported by The Associated Press last Dec., alleging that people were singled out because of their race & gender. Only 50,892 of the 71.5 million Int'l air travelers who passed through Customs in 1998 were subjected to some level of body search, most of them simple pat-downs.
• Country of Origin Fib Proves Costly .......... as a Florida electronics company has agreed to pay US$14M to settle charges that it had violated import laws. U.S. Customs said Recoton Corp. of Lake Mary, Fla., has agreed to make the payment, one of the largest negotiated by Customs. The company sells consumer electronics accessories, loudspeakers & car audio systems under such brand names as RoadGear, Advent, Jensen & Discwasher. As part of the agreement, the company also is settling claims that it violated U.S. law by mismarking the country of origin on its merchandise & by understating the value of imported merchandise, a move that deprived the government of about US$4..1M in duties.
• Customs Cancels Licenses ............ as the list includes Sterling Int'l's license in Dallas. In San Francisco, the licenses of Alrod Int'l, Armen Cargo Services, Columbia Shipping, Cosdel Int'l Co. and G.M. Miller & Co. were also canceled. Customs often cancels broker licenses because of corporate mergers, a broker's death or failure to receive a broker's tri-annual status report.
• Lapse in GSP Program Progress ........ as the JOC has reported that importers are very concerned about Congress' lack of progress toward renewing the Generalized System of Preferences (GSP) program, which expired on June 30, 1999. The article cites the source as stating that there is a 50-50 chance that the GSP program will be renewed.
• Commodity Warning ......... as the Danish Maritime Authority has issued a warning to carriers to take better care when handling shipments of calcium hypochlorite. The chemical has been cited as the cause of several recent fires aboard containerships. Calcium hypochlorite is commonly used in household cleaners & disinfectants for swimming pools. According to the Int'l Maritime Dangerous Goods Code, calcium hypochlorite may cause fires when in contact with combustible material, organic substances or ammonium compounds. Hazardous materials specialists suspect that calcium hypochlorite may pose a fire hazard when temperatures reach 35 degrees Celsius or above. These temperatures may be reached in tropical climates, during the summer or under a variety of other conditions. Calcium hypochlorite fires are known to be explosive & difficult to extinguish.
• Commodity Warning ........... as the U.S. Commerce Dept.'s Export Administration has published proposed rules for U.S. industry to comply with the Chemical Weapons Convention, a disarmament and non-proliferation treaty ratified by over 120 countries. Under the regulations, the U.S. will have an obligation to monitor U.S. companies that manufacturer and trade certain toxic chemicals that could possibly be used in the production of chemical weapons. The industry has 30 days to comment on the proposed rules. The text of the Chemical Weapons Convention is available on the web. http://www.cwc.com
• Lethal Cargo Investigated .......... as the president of Kazakstan, a former Soviet republic that reportedly sold 30 fighter jets to North Korea, has ordered a criminal probe into suspected arms sales violations by government officials. President Nursultan Nazarbayev ordered the State Security Committee to investigate the deals, according to the Interfax news agency. The moves come as South Korean officials claim North Korea bought 30 Soviet-made MiG-21 jet fighters from Kazakstan earlier this year. Kazakstan has not officially commented on the allegation. The first incident began March 19, when officials in Azerbaijan's capital, Baku, detained a Russian plane that arrived from Kazakstan with 6 disassembled MiG-21s aboard. Azeri customs officials said the cargo was bound for Yugoslavia in violation of a U.N. arms embargo.
• Thanks UK Customs, From All of Us ........ as there is just released word that it seized nuclear-weapon grade materials bound for Pakistan, and arrested 3 British men. The container of 20 tons of aluminum had been tracked from the U.S. was bound by ship for Dubai in the UAE when it was intercepted in May in a storage container terminal on an island off the Southeast coast of England. Intelligence reports indicated the shipment was destined for Pakistan. A spokesman for the Customs' National Investigation Service said he could not comment on an ongoing case. The cargo was seized at a time of heightened tension between India and Pakistan over the disputed territory of Kashmir.
• Saudi Scoreboard ........... as the numbers of executions by beheading has risen to 61 people put to death in Saudi Arabia so far this year, mostly for drug smuggling.
• Humans As "Sealed" Cargo ......... as U.S. agents using welding torches & crowbars discovered 132 Chinese illegal aliens in a secret compartment in the hold of M/V Prince Nicholas docked in Savannah, Georgia, on Friday the 13th. U.S. Immigration & Naturalization Service said the migrants were found by agents acting on a tip that ship, registered in Cyprus, was smuggling illegal aliens. Agents boarded the ship nine miles (14 km) from Savannah but found no sign of the migrants. But when the ship docked at Savannah, INS agents armed with welding torches and crow bars were waiting. They found the Chinese in a secret compartment of the hold that had been covered with a sheet of steel and a door that was welded in place. Georgia's booming economy and low unemployment rates have led to a shortage of workers in many sectors of the economy, including agriculture.

3. The Cargo Letter Financial Page

• Alaska Air. UP record 2nd quarter net income of US$42.1M, or US$1.59 per share (diluted), compared with US$38.9M, or US$1.51 per share, for last year's 2nd quarter. Operating revenues for the quarter were US$530 million, a 9.2% increase.
• Airborne Express. DOWN. Net income was down 17% in the 2nd quarter to US$17.7M, while revenue & shipment volumes remained flat and took a dip.
• Arkansas Best Corp. (ABF) UP 47% with 2nd quarter income of 1999 of US$11.1M, or $0.47 per diluted common share, compared to same period 1998 income from continuing operations of US$7.7M, or $0.32 per diluted common share. 2nd quarter net income of US$11.1M is the highest quarterly net income in the Company's history.
• Atlas Air. UP with net income of US$13.3M for the period, marking the 6th consecutive quarter of record profit. 2nd quarter revenue rose 58% over the previous year, to US$138.6M.
• Cathay Pacific. DOWN with a net loss for the 12 months of 1998 of US$542M. Analysts, however, see a bright side to the Cathay scenario and say Cathay could spring back into substantial profit by the end of the year.
• China Eastern Airlines. UP At Last? Officials are tight-lipped about a rumor the company may declare a profit for the 1st 6 months of operations in 1999. Analysts had expected the company to post a loss, after several quarters of consistently disappointing earnings. Airline officials refuse to comment.
• Circle Int'l Group. DOWN with net income of US$4.8M in the 2nd quarter ending June 30, compared to US$7.85M in earnings the same time last year. The SFO based company's profits were reduced by an increase in its sales force & continued technology investments. Revenues for 2nd quarter rose 12% to US$195.2M.
• Consolidated Freightways. UP with 2nd quarter revenue of US$589.8M, a 6.9% improvement over same period 1998. First half revenue improved 4.6% over last year to US$1.15B. Net income for the quarter and the half were respectively US$2.5M ($0.11 per basic share) & US$9.3M ($0.41 per basic share) compared to last year's record second quarter of US$7.5M.
• Continental Airlines. UP with its 17th consecutive profitable quarter with 2nd quarter net income of US$137M (US$1.93 basic earnings per share). Net income was US$221M for the first 6 months of 1999. Continental ended the quarter with US$1.3B in cash and short-term investments. Cargo volume was up 2.9% in the quarter. Cargo revenue was down 8.8%.
• Eagle USA Airfreight. UP as revenues for the 3rd quarter increased 40% to US$149.8M from US$107.1M in same period 1998. Net income for the quarter totaled US$7.3M, a 29%. The stock has just split 3 for 1.
• Emery Worldwide (airfreight division of California-based CNF Transportation). DOWN a 21.6% drop in operating income, to US$17.4M, in the 2nd quarter. In the first half of 1999, operating income at Emery fell nearly 30% to US$21M. Revenue grew 11.2% to US$585.9M in the 2nd quarter. In the first 6 months, Emery's revenue was up 6.4% at $1.1B. Emery's North American airfreight tonnage fell 2% in the 2nd quarter, compared to last year, while international tonnage rose 11%.
• Forward Air. UP with record operating revenue & earnings for its 2nd quarter of US$40.8M, an increase of 32.9%, compared with US$30.7M for the same quarter in 1998. Operating income from continuing operations for the period was US$5.9M, an increase of 59.5%, compared with US$3.7M in the prior-year quarter.
• Interpool (NYSE:IPX) Reported 1999 2nd quarter net income of US$5,726,000, or $0.20 per diluted share, as compared with net income of US$9,374,000, or $0.33 per diluted share, for same period 1998. Revenues during 2nd quarter of 1999 were US$44,154,000, as compared to $44,506,000 in same period 1998. For the first 6 months of 1999, net income was US$14,982,000 or $0.52 per diluted share, as compared with net income of US$17,484,000, or $0.61 per diluted share, for same period 1998. Revenues for the first half of 1999 were US$100,725,000, as compared to US$87,338,000 in the same period last year. Interpool has announced it's intention to explore the separation of its Microtech and Poolstat businesses into a separate entity under the Microtech name, and effect a spin-off of Microtech to Interpool shareholders.Interpool, a world leader in container & chassis leasing, is the corporate sponsor of The Cargo Letter library & search engine Internet pages. Continuing thanks, Interpool!
• Kitty Hawk. UP with net income of US$3.8M on US$168.0M in revenue in the 2nd quarter, compared to US$4.4M in net income on US$155.8M in revenue last year.
• KLM. DOWN for the 2nd quarter with a disappointing US$46.8M net income, down from US$107.8 in the year-earlier period. Operating revenues, including positive rate of exchange influences, almost equaled last year. Operating expenses increased 3% to US$1,591M from US$1,550M However, KLM recorded a 10% increase in cargo traffic for the month of July, compared with the year-earlier period, strongest on Asia Pacific routes, up 19%.
• Sea Containers Ltd. UP as profits leap 33% for the quarter & 6 months ended June 30. Net earnings were US$23.2M on revenue of US$330M for the quarter. Diluted earnings per common share for the quarter were US$1.25, up 32% from the US$0.95 reported for the year-earlier period.
• Southwest Airlines. UP as net income for 2nd quarter 1999 increased 18.3% to $157.8M.
• The Freight Connection. UP as revenues for the 1999 2nd quarter were a record US$7.76M, an increase of 10%. Net revenues for the 3 months ended June 30, 1999 rose 3% to a record US$767,000. Net income during the 1999 2nd quarter was US$73,000, or $.02 per share. The Freight Connection is an intermodal marketing company (IMC) & transportation broker
• Trailer Bridge, Inc. UP with total revenue of US$22,686,417 for the months ended June 30, 1999, an increase of 23.2% compared to 2nd quarter 1998.
• UPS. UP with a 28.4% increase in net income worldwide for the 2nd quarter to US$588M, compared with US$458M for same period 1998. Operating profits for international package operations outside the U.S. almost tripled, rising to US$65M for the quarter from US$23M a year ago. Express volume from Asia Pacific operations increased 29.2%. UPS also introduced 2 additional air services to Hong Kong, boosting the number of UPS flights out of Hong Kong from 6 to 12 per week.

OUR "B" Section: FF World Air News

4. Freight Forwarder World Air Briefs

• Emergency Alert ........... as Reuters is reporting that all British & United States airlines are on top security alert because of warnings of a bombing campaign by Moslem fanatics, a British newspaper reported on 14 August. The Daily Mail said a secret warning, based on information from U.S. intelligence, had been given to the airlines to beware of attempts to smuggle bombs onto planes in the next three months. ``Behind the threat are thought to be supporters of one of the world's most wanted terrorists, Saudi exile Osama bin Laden,'' the newspaper said in a front-page report. The United States has linked Bin Laden, based in Afghanistan, to the bombings of American embassies in Kenya and Tanzania a year ago in which at least 226 people died. ``The warning from the Department of Transport, which follows a tip-off from U.S. intelligence, specifically mentions Samsonite suitcases,'' the report said. UK authorities & BA have both refused comment on the report.
• Uncle Sam Is The Air Champ ........... as the U.S. Postal Service carried 45% of U.S. domestic air cargo shipments in 1998, taking the largest share of the market. According to Atlanta-based consulting company, The Colography Group, the U.S. Postal Service moved 1.3 billion air shipments, substantially more than the 2nd largest carrier FedEx, which took a market share of 25.6% in moving 718.4 million shipments. UPS took a 15.6% market share, giving it 3rd place in the study. Total U.S. domestic air revenue was up 7.2% from 1997 with a revenue of US$31B while tonnage grew 7.3% to 8.9 million tons, according to the study. The U.S. Postal Service has awarded Kitty Hawk, the Dallas-based air freight carrier, a 6 year contract to fly mail &manage the USPS's Western U.S. hub operation. Kitty Hawk expects the contract to add more than US$44M in annual revenue.
• Low Marks For EU Air Speed ........... as delays at European airports reached record levels in both May & June this year, confirming 1999 will probably emerge as the worst year ever for holdups, according to the Association of European Airlines (AEA). Preliminary figures for June showed that 37.3% of all intra-European flights departed more than 15 minutes late, the fourth time the 30% figure has been broken in the 1st 6 months of the year. AEA noted the figures were affected by flight restrictions caused by the Kosovo conflict, but said the lion's share of delays were caused by infrastructure problems, in particular air traffic control bottlenecks. AEA said problems were largely concentrated in the arc between northern Italy, Switzerland, southern France & north-eastern Spain. Once again, it was the newly opened Milan-Malpensa airport which suffered the most serious delays, where 74.7% of departures were delayed by an average of 52 minutes each. Barcelona & Madrid were the next worst, with Rome, Munich & Paris Charles de Gaulle also high on the list. AEA praised the performance of the two London airports, Vienna, Dublin and Larnaca, in Cyprus. The best records of all were held by Oslo, Copenhagen, Helsinki & Stockholm, which were also the only airports in AEA's survey to record a reduction in delay between the 1st & 2nd quarters.
• Rates Ready To Rumble ........... as Cargolux & KLM Cargo say they will raise its freight rates by an average of 8% to 10% in most markets worldwide beginning in September. The carriers expects strong demand in the 4th quarter on routes to the Far East & U.S. from Europe, and from the Far East to Europe. This across-the-board increases come after other carriers, including Lufthansa Cargo, Northwest, Air France & Cathay Pacific, have announced similar increases in anticipation of a rush amongst companies seeking to beef up stocks in preparation for any computer problems associated with the millennium change are expected to push air cargo volumes to peak levels. Some shippers have even opted for air transport to be sure their stocks are not in sea transit when potential Y2K problems are expected to hit during the holidays.
• IATA Pours On The "E" .......... as the Int'l Air Transport Association (IATA) & IBM are developing a service capable of linking the e-ticket systems of hundreds of airlines around the world. The new service, built on industry standards is expected to expand significantly the acceptance & use of e-ticketing among IATA's 266 Member airlines and the industry as a whole. This new isolation will allow participants to link to a centralized e-ticket service to process & exchange e-tickets. Travelers using e-tickets will then have the flexibility to fly, and if necessary rebook, on more than one airline on the same trip. This cannot be done today -- unless the e-tickets are issued by one of the few carriers with existing reciprocal agreements.
• New IATA Chief ......... as Günther Matschnigg, currently V.P. Technical Base Maintenance Organization within Austrian Airlines, is to join IATA on 1 Sept.1999, as Sr. Director designate, Operations & Infrastructure. He takes over as Sr. Director on 1 Jan. 2000, following Karel Ledeboer’s retirement from IATA.
• Panalpina EU Air King .......... as it ranks as the largest air freight forwarder in Europe, measured by sales revenue. A ranking of IATA, based on 1998 statistics of the industry's Cass payment system, shows that Panalpina held its position as the largest forwarder in Europe. Panalpina had European sales of US$338M through Cass last year, representing a 6% share of the market. European sales through Cass for all operators totaled US$5.6B in 1998.
• New Delta Cargo Chief ........... as Delta Air Logistics, as Delta Air Cargo is now called, has a new leader, Rick Nixon, a 24-year veteran of FedEx.
• China Will Fall In Line ........ as its aviation authorities have ordered domestic airlines to change the way cargo charges are calculated. The Civil Aviation Administration of China ordered the charges be based on the international standard for cargo transportation. That means cargo charges should be calculated based on weight and the type of goods. For special goods such as agricultural products, biological material and rush deliveries the airlines are to establish set prices. Bulk items will be subject to minimum shipping charges.
• DHL Cash Pump ........ as DHL World Wide Express plans to boost its aircraft fleet & upgrade its terminals in Europe and Asia with a US$1.5B cash injection. The company's non-US arm, DHL Int'l, will use US$1.3B to buy at least 40 Boeing or Airbus planes to be phased into its network of European & Africa routes from 2001 onwards. DHL currently owns a European fleet of 32 Boeing 727s. While the models of the new planes have yet to be confirmed, DHL is expected to make a firm order in the next 2 months. The company has allocated more than US$200M to build hubs in Singapore, Cologne & Frankfurt. Modernization of DHL Japan's delivery fleet & terminal equipment is next.
• Less BA ........... as British Airways is expected to announce plans to cut the number of passenger (combi) air miles it flies by 12% over the next 3 years in a drastic attempt to curb falling yields, said industry sources. While the majority of BA's rival lines have been increasing capacity, sources say BA will be reducing a number of unprofitable routes and will switch to smaller aircraft in the hope of halting its falling passenger yields. According to analysts, BA's passenger yield was down 7% on last year due to price pressure from overcapacity on major services, particularly North American routes. BA's 1st quarter results are expected to drop drastically due to increasing overcapacity & high fuel bills.
• BA On The Road ......... as British Airways' cargo unit has awarded contracts totaling US$128.5M to European trucking firms Jan de Rijk & Saints Transport for road transport in the UK, Ireland & continental Europe. Jan de Rijk will operate & manage all European and Irish services, including those crossing the English Channel. Saints Transport will provide service in the U.K., including shuttle services linking London's Heathrow, Gatwick & Stansted Airports.
• EU Says OK .......... as it has cleared the alliance between Alitalia and KLM after the two promised to end their monopoly on flights between Amsterdam and Italy's Milan & Rome. The EU's Competition Commission said in a communique that the airlines' activities are mostly complimentary & therefore the alliance between them does not raise major competition issues.
• Anti-Terror Move ............. as the U.S. bans business with Afghanistan's Ariana Airlines. The carrier's assets in the U.S. have also been seized on charges that the carrier is supplying Taleban leaders who harbor accused terrorist Osama bin Laden. The Taleban Islamic militia rules over 90% of Afghanistan. The US has identified US$500,000 of assents belonging to the carrier that will be seized. The US ban will have little effect on its operations as the carrier flies only from Kabul to Sharjah & Dubai, Jeddah & Bombay with one Boeing 727 for passenger flights & one Antonov 12 for cargo services.
• Our Broke PAL Is Cranky .......... as Philippines regulators are threatening to reverse a bilateral aviation agreement with Taiwan, in another sign that the Philippine government has adopted a policy to protect its debt-ridden national airline, Philippine Airlines (PAL). The impasse between Manila & Taipei comes after the Philippine Civil Aeronautics Board suspended in July the rights of Taiwanese carrier China Airlines to serve Manila from Hong Kong. In May, Philippine regulators also repealed the rights of Emirates airline to fly from Hong Kong to Manila. The Philippines reportedly wants to renegotiate aviation agreements with Hong Kong, Singapore, South Korea & Taiwan to reduce competition for PAL, which still owes more than US$2B to creditors.
• The War Is Over For LanChile .......... as it resumed its regular flights to the Falkland Islands on 7 Aug. LanChile made the decision after the government announced that the ban on flights to that destination by national airlines had been lifted.
• Sun Sets ......... as South Africa's 3rd largest airline, the mostly black-owned Sun Air, closed down on Friday the 13th because of undisclosed financial losses. The government board that rules on major acquisitions said Sun Air was ``a failing company'' and it was in the public interest to ensure an orderly shutdown. The plan is to sell Sun Air's black-owned shares to South African Airlines, the country's largest carrier. Under a post-apartheid program that encouraged black ownership of public companies that have been privatized, 75% of Sun Air was black-owned. ``It's a tragedy that one of the truly racially integrated companies, which epitomizes the spirit and hope of the new South Africa, had to close its doors due to profit and commercial considerations,'' chairman of the South African Pilot's Association, Glen Watson told the daily newspaper, The Star, in Johannesburg.
• Win Looses .......... as WinAir decided to shut down after operating low cost services out of the Long Beach Int'l Airport, CA, for 8 months. The decision was made after the carrier was unable to secure additional funding to continue its operations. Passenger numbers were on track with its expectations but its startup budget could not cope with costs significantly higher than expected, according to founder Richard Winwood.
• Taiwan Merges .......... as Taiwan-based carriers Mandarin Airlines & Formosa Airlines will merge. Mandarin is a subsidiary of China Airlines, which also holds a 41% stake in Formosa. Mandarin flies 3 jets to destinations in Canada & Australia. Formosa operates a fleet of 14 aircraft on domestic routes.
• No More Air Lanka .......... as it has been renamed Sri Lankan Airlines in a bid for greater national carrier recognition.
• Atlas Gets KAL ........ as Korean Air has become Atlas Air's newest customer, joining the 13 other airlines currently in Atlas Air's customer portfolio. Indeed, we've been watching the Atlas freights calling at KAL's impressive LAX warehouse. Thanks for the recent tour for our The Cargo Letter staff! We were impressed.
• Virgin Atlantic Gets Windy ........... as it has been awarded daily landing slots at Chicago's O'Hare Int'l Airport by U.S. regulators. The British carrier plans to introduce a daily trans-Atlantic Chicago-London service in Nov. using an Airbus A340-300. The decision comes as a blow to United Airlines which had opposed the Virgin application on grounds that U.S. airlines do not receive comparable access to London airports.
• Swiss To Be GSA ......... as Swisscargo will begin serving as the exclusive general sales agent (GSA) in Switzerland for Cargolux, Europe's largest all-cargo carrier. This is the 1st time Swisscargo has acted as a GSA for a partner cargo airline, Swisscargo said. SAir has held a 33.7 percent interest in Cargolux for 2 years.
• Emery Worldwide Commits To India .......... as the express carrier has signed a block cargo space agreement with Indian Air on flights between Singapore & several Indian cities, including Bombay, Bangalore, New Delhi & Calcutta. Emery has committed to pay for 22 metric tons of capacity a week & will provide airport-to-door delivery for shipments arriving in India. Indian Air has 5 flights a week from Singapore.
• Code Share For World's Busiest Route ......... as Alaska Air & Reeve Aleutian Airways have announced a code-sharing agreement on flights between Seattle & Anchorage to the two Russian cities of Petropavlovsk & Yuzhno-Sakhalinsk.
• The Quiet Cargo Night ......... as the Dutch government wants to close Rotterdam Airport to all air traffic at night, joining Sydney and a growing number of cities which value quiet over commerce.
• FedEx Won't Be Copied ......... as it will open 38 full-service shipping centers in select Kinko's branches in North America this year. These FedEx World Service Center facilities will be staffed by FedEx employees during business hours and offer a full complement of express shipping solutions.
• Continental "Drives" It's Employees Hard ......... as Continental Airlines will give away another 8 Ford Explorers to reward employees with 6 months of perfect attendance. Since the program's inception in 1996, the airline has given away 55 sport utility vehicles, including tax, title, license and gift tax paid for by the company. Lucky winners are drawn from a pool.
• Forwarders Face Tax Claims .......... as Nieuwsblad Transport reports that 4 air forwarders of at Schiphol Amsterdam Airport are facing Dutch Internal Revenue claims of US$1.1M as a result of fraud by the now bankrupt Aircargo Experts Co. The four are Visbeen, Kühne & Nagel, NCS & Mobil Neutraal. The agents looked after the tax returns of Aircargo Experts (also known as Aircargo Exports) which became insolvent in 1998. The management of Aircargo Exports is said the object of a criminal investigation by the police because it is suspected of having been involved in forging invoices.
• LAX Undertakes Next Cargo Expansion ............ as consultant, Black & Vech, has been hired by LAX to study the allocation of air cargo warehouse space at LAX. Results of the study should be presented to the Board of Airport Commissioners shortly. Work on the new Cargo Building "A" project, a 150,000 sq. ft. building to replace functionally obsolete Buildings No. 5 & 6 (former U.S. Customs HQ) should commence by October 1, 1999. Indeed, from our The Cargo Letter office windows, it is clear that the site is being prepared for this US$12M project. Negotiations are under way to purchase the US Airways cargo building to provide space for Cargo Building "B," which will be another 150,000 sq. ft. Building to replace obsolete cargo buildings. These developments will complement a new service road that will connect all cargo buildings east of Sepulveda Blvd. between Century Blvd. and Imperial Highway. For example a truck will be able to deliver freight to Mercury Air Cargo at Avion Drive & Century Blvd. and then drive to Singapore Airlines at Imperial Highway and Sepulveda Blvd. without driving on a City street. The move will speed interline freight and reduce crowded LAX traffic. At the last Board of Airport Commissioner's meeting, authority to advertise for the demolition of the northerly 50 feet of Air Freight Building No. 1 was approved.
• Fine New MIA Expansion .......... as Fine Air Services Corp. has entered into a lease and development agreement with the Miami-Dade Aviation Dept., in which it will lease a parcel of land to construct a 125,000 square foot cargo facility with an adjacent ramp estimated to cost approximately US$20M. Together with Lan Chile, Fine Air has agreed to undertake this development, known as the Eastern U Development. The project is slated to start within the next 90 days. Fine Air will pay for its share of the development cost over a 25-year period through a sub-lease agreement. The new import cargo facility will be utilized by both Fine Air Services & Arrow Air. The space is more than 3 times as large as Fine Air & Arrow Airs' current 37,000 square feet of import facilities. Approximately half of the space, 66,000 square feet, will be refrigerated. The project will be completed within one year.
• But Wait, There's More ........... as United Airlines has also started construction. It will have a new a US$26.5M cargo facility at Miami Int'l. The facility, to be completed in late 2000, will house 95,000 square feet of cargo space under a fabric-covered tent-style "Rubb" roof. The facility will include 7,000 square feet of cold storage for perishables. The building will also accommodate 20 dock bays. An additional 52,000 square feet of space will be available for expansion. United handled 62,500 tons of cargo at MIA in 1998. UA averages about 3,000 tons a week at MIA, of which about half is perishables.
• Volume Notes Year Over Year. For Lan Chile total accumulated system cargo traffic through July increased 34.3%. For United, revenue ton miles were up 3% in July to 1,451,237. For Northwest, cargo ton miles were up 17% to 168,092.
• Dog Bites Plane .......... as authorities at Logan Airport said an Irish wolfhound freed itself from a kennel during a United Airlines flight to San Francisco & chewed up the cargo area. The dog, whose name was not released, managed to gnaw into wires for the Boeing 767's landing gear, its cockpit warning lights and others that slowed the plane upon landing by extending its wing flaps. The pilot was able to land the plane safely in San Francisco, albeit at a slightly faster speed than normal because of the impaired flaps. The July 24 flight was carrying 159 passengers and a crew of 9. FAA says dogs have damaged airplanes before, but this is the 1st time a dog is believed to have caused service difficulties for a plane.
• .... And Do Remember To Buy Cargo Insurance ............. as Russian government will allow the cash-strapped military to carry civilian passengers and cargo on charter flights to earn extra money. Alexander Neradko, head of air safety and air traffic at the Federal Air Transportation Service, told the Reuters news service that a government order allowed flights by certified military transport aircraft to both civilian and military airports. "There are already complaints that the military can use low fares to win over passengers because military airports are almost everywhere," he said. Russia's military has fallen on hard times, often short on food, fuel & cash needed for the 1.2 million strong armed forces. Aircraft owned by the air force, Interior Ministry, the Emergencies Ministry, the border guards & the customs service could be used for flights, according to the new order. Sure to please the most discriminating shippers, the new order also allows experimental and test flight centers to carry freight, to help raise money for test flights and other needs. A spokesman provided comforting word that, "Now we are able to maintain our planes & airports.'' Indeed, on 27 July, a Russian cargo plane with at least 7 people on board crashed shortly after take-off from the Siberian city of Irkutsk. All on board survived the crash, and were hospitalized with burns of varying degrees of seriousness. While Russian officials said only 7 people were on board, Russian news agencies said there may have been as many as 12, but then again, who knows? The flight, hauling 30 tons of cargo, began its journey in Beijing and landed in Irkutsk to refuel.

Assembled from wire stories, the Associated Press, Reuters, Hong Kong Shipping News & other world sources.

OUR "C" Section: FF World Ocean News

5. Freight Forwarder World Ocean Briefs

• The New World Armada ........... as the world's largest sea-going fleet is now 230 ships strong following the merger of AP Moller's Maersk Line & Sea-Land Services last month. In the US$800M deal, Maersk inherited from Sea-Land 70 container vessels, 200,000-TEU containers, 24 container terminals & related equipment & certain lease options. The new entity, operating under the brand name Maersk-SeaLand, has a container capacity of 550,000 TEU. The mega-carrier will take a 16.4% market share on container trade between Asia & No. America. Runner-up Evergreen Line has 10.5%. In trans-atlantic trade, Maersk-SeaLand will hold an estimated market share of just under 20% on Europe & No. America trade. The largest competitor on the route, P&O Nedlloyd has a 15.2% market share.
• The "New" Sea-Land, Will Not Be "Sea-Land" ........... as this business unit of CSX Corporation, will remain a U.S. domestic container shipping company following the sale of its Int'l container vessel & terminal businesses to Maersk Line. Sea-Land will focus on providing service in the domestic trade areas of Alaska, Guam, Hawaii & Puerto Rico. The new domestic company will continue headquartered in Charlotte, NC, with 20 offices in the continental U.S., Hawaii, Guam and Puerto Rico. Within 6 months, Sea-Land will announce a new name that mirrors its focus on the domestic trade. Any suggestions?
• The Future of Carrier Antitrust? ............ as House Judiciary Committee Chairman Henry Hyde has challenged arguments that passage of the Ocean Shipping Reform Act and hearings held by Hyde's committee in May pointed to continued endorsement of shipping lines' antitrust immunity. "I remain skeptical of antitrust immunity," Hyde said in the letter. The recent sale of the Int'l shipping operations of Sea-Land Service Inc. to A.P. Moller, parent of Maersk Line, "only heightens my skepticism," Hyde said. Deliberations on the shipping reform act "were simply inconclusive as to whether antitrust immunity should be continued," Hyde said.
• U.S. Planning A Comeback? .......... as U.S. Senate Majority Leader Trent Lott & Sen. John Breaux, D-La., will soon introduce legislation to establish the nation's 1st U.S. tax-free ship registry. The registry would be run jointly by the Maritime Admin. & the U.S. Coast Guard, and would be open to non-U.S.-built ships. The goal of the registry is to bring new tonnage under the U.S. flag which would be available to the Defense Dept. in national emergencies. Once registered, the ships will operate tax-free, and seafarers' wages, up to US$80,000 annually, would not be subject to U.S. income taxes. To qualify for enrollment, ships in the new registry will be required to meet U.S. Coast Guard standards. Vessels are currently made available to the Defense Department through the Maritime Security Program, a 10-year U.S. ship subsidy program which covers 47 U.S.-flag, U.S.-crewed ships, at US$2.1M per vessel, per year. Not yet halfway through the 10-year program, some in Congress have been questioning continued support of the program. Since the program started in 1996, U.S.-flag lines such as APL & Lykes Bros. have been acquired by foreign companies that have set up U.S.-based ship-operating companies to circumvent the U.S.-flag requirements.
• FMC Awash In Contracts .......... as the Federal Maritime Commission (FMC) received almost 15,000 confidential contracts in May & June, compared to 3,400 during the same period last year, FMC chairman Hal Creel said this month. Referring to the confidential contract surge under OSRA, Creel said carriers & shippers are "making extensive use" of their newfound authority to keep their shipping arrangements private. But, so far, very few of the new contracts cover global services, he said. The FMC chairman also said his agency has found some defective carrier tariff systems, which are not easily accessible or accurate. "We also have our spotlight on the level of charges carriers are imposing for accessibility" to tariffs, he said. "We have identified certain situations that appear to be out of line." Creel expects to see more industry consolidation through mergers & alliances, an increase in discussion agreements and further erosion of liner conferences. Carrier antitrust immunity "will be in the center spotlight," he said, noting House Judiciary Committee chairman Henry Hyde's concerns which are now before the U.S. Congress.
• So, No More Paper Please! ......... as Service contract filings will no longer be accepted under the FMCs dial-up Automated Tariff Filing & Information System after the close of business, Sept. 30. Beginning Oct. 1, all service contracts will have to be filed through the FMC's Internet-based system. Filing via the Internet requires a log-on ID & password. To obtain an ID & password, request a service contract registration form (FMC form 83) FMC's Bureau of Tariffs, Certification and Licensing at: 202-523-5796.
• Singapore Launches Anti-Pirate Navy ......... as it is taking a tougher stance against pirates with the deployment of 40 high-speed patrol boats to maintain an armed presence in the waters near the city state & the neighboring territories of Malaysia. The Singapore government is attempting to regain control of the Malacca and Singapore Straits after rampage by pirate groups has caused fear among mariners. The Singapore Police Coast Guard reported 22 cases of piracy in the Malacca Straits between January & May. To combat the mayhem, the Police Coast Guard will deploy 20 Australian made dual water-jet powered boats this year, and 20 more in 2000. The vessels are capable of 40 knots. Go get'em! Singapore will host a Piracy Conference on 22 October. E-mail for details: ssa.admin@ssa.org.sg
• China Makes First Crack Down Against Pirates ........... as 14 Myanmarese accused of hijacking the Taiwanese cargo ship, M/V Marine Master, have been arrested in China. Hijacked in March en route from China to India by 20 pirates wearing military uniforms & carrying machine guns, the ship's 22 crew members were set adrift in lifeboats. They were later rescued. The ship, renamed M/V Nuovo Tierra by the hijackers, was detained by Chinese authorities during a maintenance stop at the southern port of Fangchenggang after its true identity was discovered. According to the Xinhua News Agency, the 14 crew aboard were arrested after they confessed to the hijacking and the ship has now been returned to its Taiwanese owner. The arrests follow serious allegations from the Int'l Maritime Bureau earlier this year, accusing China of refusing to arrest or prosecute pirates & of keeping pirated ships arriving at Chinese ports. The allegations have been strongly denied by China. Fifteen ships were hijacked in Southeast Asia last year, in addition to many pirate attacks, as high seas piracy continues to grow in the region.
• But Not So Fast, PRC ........ as the Int'l Maritime Bureau (IMB) has confirmed that the suspected hijackers of the small cargo vessel M/V Tenyu, whose 15 crew have never been found & are presumed to have been murdered, have been repatriated by China. The vessel, which was hijacked in Sept. 1998, was discovered in Zhangjiagang in Dec. using the name M/V Sanei 1. The IMB has now confirmed that they were returned to Indonesia several weeks ago, just a few days after an IMO committee meeting at which the Chinese authorities robustly defended their handling of such cases, saying China strongly condemned all types of criminal acts at sea and had, within the full limits of its laws, dealt heavy blows to such acts. It has been a source of major concern within the shipping industry that hijacked ships are regularly turning up in Chinese ports and that the suspected perpetrators of the attacks have invariably been repatriated by the Chinese authorities. In some cases pirates have literally been getting away with mass murder. Finding that a ship has a false identity and is really a hijacked vessel may be a long way from proving that those on board it know anything about the hijack or the fate of the crew. Nevertheless, the repatriation of these men sends an unfortunate signal to the gangs involved in ship hijacks. And in this case the ship's mate had previously been found on another hijacked vessel, the M/V Anna Sierra, where he was second mate.
• But There's Hope ........... as Thai 2,000 dwt gas oil tanker M/T Siam Xanxai, hijacked off Tioman Island with a full cargo nearly 2 months ago, is now reported to have been detained in the So. Chinese province of Guangdong under the name M/T Auo Me 2. The ship & crew were seized by the authorities 2 weeks ago for smuggling cargo. The missing member of the 17 crew, Ruangwat Sangnoi, was found when the ship was detained, having been kept on board by the pirates due to his technical knowledge of the ship. It is understood that the owners have traveled to Guangdong to identify the ship.
• Scared Strait ........... as attacks by pirates in the Singapore Strait have prompted fears that shipping may be put off using the Strait and have also raised the possibility of a major accident occurring in the busy international waterway. Sixty-eight of the 115 actual or attempted attacks so far this year occurred in So. E. or East Asia but the most serious incident was in Mexico where pirates held 253 ferry passengers hostage and threw 2 security guards overboard, one of whom drowned. The latest IMB report says one person was killed in the period, in the Mexican incident, compared to 26 in the first half of last year. Nevertheless extreme violence remained a feature of many attacks and one crewman of a tanker hijacked off Tioman Island, Malaysia, is still unaccounted for. Attacks frequently involved taking the bridge watchkeepers hostage & preventing them from carrying out their duties. This means that ships are steaming without anybody ensuring safe navigation. That is a recipe for disaster in the crowded and restricted waterway. On Jan 16 a loaded VLCC, the M/T Chaumant, was attacked in the Philip Channel. The pirates threatened the watchkeeping officer with a machete and tied his hands. The IMB notes: "The serious consequences due to the grounding of collision of a VLCC cannot be overstated." Four other tankers were boarded in the Singapore Strait.
• China Lowers Commodity Boom ........... as Japanese container shipments to So. China have fallen substantially as Chinese authorities crackdown on illegal imports. Container volumes to China have fallen by up to 50%, according to COSCO Japan, the Japanese subsidiary of the mainland-owned shipping giant. COSCO officials said owing to strong volumes moving from China to Japan, they will maintain existing service along the route. But a company spokesman said they would monitor volumes closely, and consider rotating smaller ships on to the run if Chinese demand continued to drop. The Japanese subsidiary said they have also suffered from falling volume on its Japan to China runs & may reduce fleet capacity if the situation continues to deteriorate. The company said smaller ships could be used on runs to Xiamen, and Shantou port could be dropped from its service schedule entirely.
• U.S. & China Talk Maritime Practices .......... as U.S. & China maritime officials will meet on Sept. 20 in Washington, to discuss prospects for a new bilateral agreement, and to address U.S. concerns over China trade practices. These practices include restrictions on vessel calls at Chinese ports, inland operations, establishing branch offices & shipping between China & Taiwan. Non-Chinese carriers say that such restrictions hinder their operations and give Chinese carriers and their subsidiaries an unfair advantage in the bilateral trade. The Federal Maritime Commission decided in July to prepare sanctions against the Chinese maritime-related companies to retaliate against the business restrictions. The sanctions may include fines against China's shipping lines. The FMC levied fines against Japanese carriers 2 years ago in response to unfair maritime practices there. Though the FMC dropped the sanctions, the agency has revived is probe of Japan's port practices. Maritime Administrator Clyde Hart will head the U.S. delegation. The bilateral agreement between the 2 nations expired last year.
• EU & China Talk Blue Water .......... as the European Commission said that it will start formal negotiations on a bilateral maritime transport agreement with China. The EC described the move as a breakthrough in transport relations between the European Union and China. The two sides have been trying to agree on the basis for negotiations for more than a year. EU member states first agreed on a negotiating mandate in 1998. The EC said that the first "technical meeting" with Chinese representatives, to clarify scope and issues for a bilateral agreement, would take place before the end of the year. The 2 sides also agreed to work toward establishing cooperation in other areas of the maritime sector.
• New Ocean Player? ........... as China Shipping Group, the new expansionist Chinese shipping line, has announced that it intends to be one of the top 10 container operators within 5 years. The Shanghai based carrier said that it plans to enter the transpacific & transatlantic trades. It also intends to start an Asia/Mediterranean container service early next year. Virtually unknown outside Asia until recently, the company has 47,000 employees worldwide and says that it is involved in general cargo shipping, container shipping, tankers, passenger shipping, crew training, freight forwarding & other activities. China Shipping Group is headed by president Li Kelin, a former senior executive of COSCO.
• Happy Birthday Panama Canal ............. as 15 Aug. marked the 85th anniversary of the opening of the Panama Canal - the last commemoration before Panama takes control of the waterway from the U.S. The anniversary celebration ``commemorates the certain triumph of Panamanian sovereignty,'' said Costa Rican President Miguel Angel Rodriguez, who was among the foreign leaders joining Panamanian President Ernesto Perez Balladares at the ceremony. Under a 1977 agreement, the United States will cede the canal to Panama on Dec. 31 and end its military presence in the Central American country. About 825,000 ships have passed through the canal since it opened in 1914. About 34 freighters pass through it daily, mostly from the U.S., China, Japan & Chile. It produces US$500M a year in revenue.
• "Dry Canal To Be A Reality? .......... as Honduras says it has lined up US$40M in loans from the World Bank & Kuwait to build highways as part of a ``dry canal'' project linking ports on Central America's Pacific & Caribbean coasts. The project is aimed at eventually competing with the Panama Canal for inter-oceanic cargo traffic. Kuwait has authorized a US$22M credit for building 75 miles of highway and the World Bank will grant US$18M for 67 miles of road in three eastern & central Honduran provinces. In 1997 Honduras signed accords with Central American neighbors Nicaragua and El Salvador to construct a so-called dry canal made of highways linking the countries' Caribbean and Pacific ports.
• More On NCBFAA Petition ........... as last month we reported that the FMC had turned down a proposal to enable forwarders to act as shippers, in effect denying a request to allow forwarders to sign service contracts directly with ocean carriers. The National Customs Brokers & Forwarders Association of America had petitioned the FMC to change the legal definition of the term "forwarder". NCBFAA had argued that a clear-cut definition would remove years of ambiguity over forwarders' status. The association also sought the ruling to allow forwarders to form shippers associations without becoming NVOCCs. The petition drew support from the National Industrial Transportation League, but was opposed by the major transatlantic and transpacific ocean carriers. The petition was also opposed by European & Japanese shipowners belonging to the Council of European & Japanese Shipowners Assn. The FMC said it will not overrule Congress, which chose to maintain the status of freight forwarders when it passed the Ocean Shipping Reform Act. Under FMC's case law, forwarders can qualify as shippers when ocean carriers delegate to them "sufficient control over the transportation of a stream of cargo." "Whether a forwarder exercises control over the movement of its principal's cargo and whether it has a direct or indirect beneficial interest in that cargo are questions ... to be determined on a case by case basis, as the necessity arises," the FMC said. FMC commissioner John Moran did not vote to approve the petition, but called for a formal agency proceeding to decide whether the commission could give "some guidance and certainty" in cases when a forwarder may act as a shipper.
• NYK Chief Passes ...... as Kentaro Kawamura, 66, president of Nippon Yusen Kaisha (NYK Line) since 1995, died on 8 Aug. in Tokyo after a long illness. Kawamura's successor will be Takao Kusakari.
• LA Has New Sister & New Direct Link ......... as the ports of Los Angeles & Saigon have established the 1st sister-port alliance to be signed between an American and a Vietnamese port. Saigon is also the 1st port in Southeast Asia with which Los Angeles has partnered. The capacity of Saigon Port will be increased from eight to 14 million tons a year by the end of this year - or early next year - to meet an expected growth in trade following the signing of the sister-port agreement. Describing the agreement as part of an effort by the Americans to help heal war wounds, Saigon Port director, Tran Van On, said some of the funds for the increase would be available through Asian Development Bank loans. The newly signed sister-port agreement would significantly increase trade between Vietnam & the U.S., he said, with cargo being carried directly between the 2 ports without having to transit as it does now.
• Let's Check That APL Invoice Again ........... as Neptune Orient Lines & its American President Lines have severe problems with joint invoicing, due to failed computer systems integration of the 2 companies, according to Lloyds List. NOL has officially admitted the problems, which arise mainly in Europe. The computer systems of APL, developed mainly for the Pacific & U.S. markets, were not suitable for Europe with its many different currencies billing conditions.
• Hamburg Sud Gets Crowley South ......... as it has reached agreement with Crowley Maritime Corp. to purchase subsidiary Crowley American Transport's South America liner services. The deal covers Crowley's services between the U.S. South Atlantic and Gulf & the East / West coasts of South America & Venezuela. Crowley's services between the U.S. & Puerto Rico, the Caribbean & Central America are not included in the acquisition. The lines expect to close the deal by Oct. 1. Hamburg-Sud will assume control of Crowley American Transport's offices & personnel in South America and those U.S. facilities and personnel that apply to Crowley's So. America services. Crowley has been the service leader in U.S./South America, controlling about 18% of No. bound & So. bound container volume last year. However, rates in the trade have fallen about 30% in the past year. Hamburg Sud also owns Columbus Line & acquired Alianca Maritima Ltd. in 1998, which, in turn, acquires Transroll Navagaceo S.A. & its Europe/East Coast of South America service this past spring. These lines provide services to both coasts of South America.
• Protecting EU Inland Rates ........... as the European Commission has approved the "not-below-cost" rule of the revised Trans-Atlantic Conference Agreement (TACA) under which the parties have agreed not to charge below cost when they offer inland transport as part of a multimodal move. TACA, whose members are Atlantic Container Line, Hapag-Lloyd, Mediterranean Shipping Co., Maersk, OOCL, NYK Line, P&O Nedlloyd & Sea-Land Service, was forced to abandon an earlier agreement to implement a fixed tariff. The Commission prohibited liner shipping conferences from fixing a tariff for inland transport, arguing that a fixed inland price was not necessary to protect against members charging below cost. Meanwhile, expect higher rates, as carriers & forwarders want to raise the rates in EU transport, in view of the growing demand for Less Than Truckload (LTL) service.
• The US$250 Back Haul ........... as on Sept. 11, a new container repositioning charge is to be introduced by the Trans-Atlantic Conference Agreement on the Northern Europe - U.S. shipping route. The charge will be applied to tariff & service contract shipments. The members of the TACA conference are listed in the previous article.
• COSCO & Evergreen Want More ......... as China Ocean Shipping Co. has ordered seven 5,250-TEU containerships, with another 3 vessels on option, from the Japanese shipyard Kawasaki Heavy Industries. The vessels will be delivered by 2001. Evergreen Marine will also expand fleet capacity with the order of 10 new U-type containerships. It's new vessels will have a capacity between 5,500 to 6,000 TEU and EMC is expected to take delivery between 2001 & 2002. During the last decade, EMC has ordered 48 container vessels of 4 different categories, for a combined capacity of 350,000 TEU. Asia rebounds!
• The UK Seizes Georgia! ......... as UK-based ship manager Denholm has seized ships belonging to Georgian Int'l Maritime Shipping, formerly the Georgian Shipping Company, amid claims of unpaid bills. The arrests follow hot on the heels of a decision to end Denholmís management of the company by its German bankers. Columbia Shipmanagement has been appointed in Denholmís stead.
• Wake of The Long horn Beetle ............ as to protect U.S. government inspectors & port workers from exposure to potentially hazardous anti-pest chemicals used in Chinese & Hong Kong cargo containers, the U.S. Department of Agriculture wants all fumigated containers labeled for easy identification. A USDA delegation will travel to Beijing this month to discuss ways to implement the new labeling system. The concern for the agency is that anti-pest fumigants, such as methyl bromide & phosphine, may not completely breakdown during transit. This posses a risk to government inspectors and importers when the containers arrive in the U.S. Safe levels for the fumigants should be 5 parts per million for methyl bromide & 0.3 parts per million for phosphine. USDA recommends that containers should be allowed to air out before they are entered. The chemicals decompose over time, but the USDA recommends ventilation to eliminate the risk of chemical exposure. All wood-packed goods sent from China are fumigated against the Asian longhorn beetle, as requested by the USDA last year.
• China Box Dumping Infects Industry ........... as worldwide the ocean container manufacturing industry is sinking fast due to the slowdown of world trade and the Chinese dumping of cheap containers. China already accounts for one million TEU of the 1.3 million TEU containers manufactured each year. Since Chinese manufactures began dropping prices of containers, some reportedly so low they do not even cover the costs of raw materials, the situation for other manufacturers is looking bleak. All 5 of Thailand's box manufacturers have closed down and in South Korea all but 1 of its 5 manufacturers has survived.
• First Stop Worth A Million For Vancouver ........... as container throughput topped one million TEU this year following the inauguration of 2 new service routes, which use the city as a 1st port of call on the No. America West Coast. More "1st stop Vancouver" routes are to be inaugurated by the end of this year.
• Ship'n Out To The Canarys ............ as Andrew Weir Shipping has formed an alliance with Spanish carrier Naviera Pinillos. Owned by the Boluda Group of Valencia, Naviera is the largest Spanish carrier to the Canary Islands.
• Albanian Army Takes Charge ............ as troops have taken control of Durres, the country's biggest port, to combat smuggling & unauthorized use of the docks. Leonidha Gjermeni, general manager of the Durres Port Authority, said he had requested the army deployment because the police and customs officials were unable to cope with smuggling and vessels threatening to use force to dock without permission. He also accused some of the police of being corrupt and said weapons smugglers were bribing officers at the port. Prime Minister Pandeli Majko ordered the security crackdown at Albania's biggest port as part of modernization efforts aimed at making the harbour the gateway to several road corridors through the Balkans. The scale of corruption at Durres staggered relief workers and NATO officials during the Kosovo crisis when the port struggled to cope with the flood of aid and military hardware.
• Farewell M/V Edmund Fitzgerald ......... as the bell rang 29 times on 18 Jul in a belated farewell to the crew of the M/V Edmund Fitzgerald, at the spot where the 729-foot freighter plunged to the bottom of Lake Superior nearly a quarter-century ago. ``Now they can rest in peace,'' said Ruth Hudson of North Olmsted, Ohio, whose son Bruce Hudson perished in the Nov. 10, 1975, disaster. A slight breeze stirred as the Coast Guard cutter Mackinaw bore about 200 mourners to a consecration service at the wreck site 17 miles northwest of Whitefish Point, in sharp contrast with the monstrous gale that hurled 30-foot waves across the doomed Fitzgerald's decks. As the names of the lost sailors were called one by one, a relative or mariner tolled the bell and tossed a pink, long-stemmed carnation into the icy blue water. Two large wreaths were dropped into the lake, one donated by singer Gordon Lightfoot, whose ballad ``The Wreck of the Edmund Fitzgerald'' enshrined the tragedy in folklore. Lightfoot did not attend the ceremony. Organizers described the event as a religious exercise, the equivalent of a graveside service. But the timing arose largely from relatives' growing concern that technological advances have made it easier for divers to explore the wreckage, which lies 535 feet below the surface. There have been a half-dozen visits by submarines & robotic cameras, and at least one scuba team claims to have reached the Fitzgerald briefly. The crewmen's bodies are believed entombed inside the ship or on the lake bottom, so many relatives insist the wreck site should be off-limits. They are lobbying the Canadian government for a legal prohibition because the wreckage is on the Canadian side of the border. They said the service establishes a moral - if not a legal - obligation to respect their wishes. ``The world should know that this is now a sacred place,'' said Robert N. Dunn, a Chicago maritime attorney.
• Container Checker Utility ........... as our friend Tia has developed a small utility that should allow you to check container numbers. The last digit of the container number is a control number that allows to check whether or not the container number is correct. Of course this free system does not give you a 100% guarantee that the checked number is right, but it does help to eliminate a few errors, if they occur. You can download this free, small dos-utility (only 37 Kb), which we have not yet tested, at: ftp://damcomar.it/pub/damcoita/conuchk.exe
• A New Star In The East ............ as China's Shenzen Container Port, which has broken into the world's top 20 ranking for related facilities & transport capacity, is continuing its success story. The port's year-on-year growth rate of 70% last year saw it grab 19th place in the world rankings. During the 1st 6 months of the year, the port handled 1.28 million TEUs, up 64.2% on the same period last year. Over 20 major shipping lines have included Shenzhen in their schedules with an average of 109 cargo vessels calling at the port each month. Meanwhile, Shanhai remains China's leading port in terms of container traffic volume. In the first 6 months of 1999, the port processed 1,866,525 TEU container volume.
• Our Home Port Smiles ........... as our Port of Los Angeles for July was up a full 20% over July 1998, handling 330,245 units of 20-foot-long cargo containers, establishing the 2nd highest 1 month total in port history & an unprecedented 3rd consecutive month that the port has handled 300,000 or more TEUs. In terms of total container volume, including inbound & outbound empty cargo containers, the port has handled 2,074,724 TEUs so far this calendar year. That figure represents a 9.9% increase of 186,938 TEUs compared with the year-earlier period. Indeed, LA's THE PLACE and we're busy here! And please keep in mind that the just larger Port of Long Beach is directly next door!
• You Might Want To Upgrade That Mobile Phone ........ as UK-based mutual insurer the Int'l Transport Intermediaries Club has given details of a recent case which highlights the need for ship brokers to pay attention to what they are told on the phone. A chatterer fixing a tanker to carry vegetable oil asked the owner whether the tanks had been washed. The owner's broker informed the chatterer's broker that the tanks had been "washed but not fresh water rinsed" by mobile phone while the latter was having lunch in a restaurant. He misheard the call as "fresh water washed." Accordingly, the ensuing salt contamination of the vegetable oil from the seawater rinse cost US$900,000.
• Attention Convoy Raiders ......... as the former Soviet Foxtrot-class submarine U-475 has been seized by port authorities in Folkestone, UK, & will be put up for auction to cover 7 months of unpaid harbor charges. The 92m conventional submarine, the largest in the ex-Soviet fleet at the time of its withdrawal from service on April 1 1994, arrived in Folkestone on June 23 1997 as a tourist attraction, a role it had served in London from July 1994.
• We've Canceled Our Little Fishing Trip To Chuuk ........ as the Federated States of Micronesia, Pohnpei, Kosrae, Chuuk & Yap in the So. Pacific, take minor offenses very seriously. According to The Swedish Club, a vessel bound for South Korea from Papua New Guinea developed engine problems and had to anchor off the Hall Islands, within Chuuk territorial waters, to make repairs. When 5 fish (count them, five) & personal fishing gear were found by police who boarded the vessel, the ship was detained under charges of fishing without a permit & illegal entry into Chuuk waters. The local lawyer used by the owners described the charges as "very serious," with a maximum fine of US$5M, but managed to negotiate a minimal penalty of US$50,000 plus his own fees, which were nearly as much again. Ships should be advised to take care to report arrival within any FSM state's 12 mile limit, and to ensure that all personal fishing gear is kept stowed while within it. Wow, the term "lighten up" seems somehow inadequate.
• This Month In U.S. Navy History .......... as on Aug. 3, 1958, the 1st ship to reach the North Pole, submarine U.S.S. Nautilus, reached 90 degrees north en route from Hawaii to the Atlantic Ocean. On August 10, 1934, USS Ranger (CVA 61) Was commissioned at Norfolk, VA. We're proud, as always.

6. The Cargo Letter Cargo Damage Dispatches

We're back! "Cargo Damage Dispatches" was one of your most popular features, for years, until Steve Schultz of Whitefish Bay took a much deserved break in 1998 from gathering all the information each month. Indeed, the ILWU has put up a special web site, just for our previous reports. We've now brought the feature back, at least in part. The Cargo Letter is searching for volunteers to fill Steve's big shoes. Please apply, and to our readers, please let us know of casualties in that most dangerous place ....... out there.

While the casualties below are only a portion of ocean disasters for August 1999, our ability to gather the info will improve in coming editions. Even this sample shows the very real dangers. McD

The Singapore bulk carrier M/V SEA CRANE (26,951 gross), Mobile for Yokohama, reported main engine problems Aug 16. She has diverted to Honolulu at reduced speed to effect repairs. ETA Honolulu 21 Aug. (August 18)

The Belize M/V GOLDEN VIRGO (6,158 gross) while anchored at Mukalla drifted aground in strong winds Aug 10. Still aground Aug 16. Tug proceeding from Aden. (August 16)

German container vessel M/V CONTSHIP HARMONY (31,207 gt, built 1997), struck underwater object in Gulf of Aqaba Aug 15 & sustained flooding to forward area. Proceeding under own power for Aqaba. (August 16)

The Panamanian M/V GARDENIA ACE (28,567 gross), bound Los Angeles loaded, had an engine-room fire and drifting off Monterey, CA, Aug 12. Fire extinguished Aug 13. Unable to regain power. Tug proceeding, and will tow to Los Angeles. (August 14)

The Italian cable layer M/V GIULIO VERNE (10,617 gross) caught fire while loading cable at the Pirelli Pier, Pozzuoli, Aug 10. Sustained serious damage to accommodation & engines. Arrested pending investigation. (August 13)

The Turkish bulk carrier M/V INANC (16,794 gross) grounded in mud at the entrance to the Savannah River Aug 9. She refloated with assistance on Aug 10. No damage reported. Proceeded. (August 12)

The Belize tanker M/T INES (3,838 gross) sank following an explosion off Fujairah Aug 9. The Panamanian storage tanker M/T THEA (68,885 gross), moored alongside, sustained damage to her after section as a result of the explosion. 5 crew are still missing. (August 11)

A yet unidentified tugboat & an oil tanker collided in the thick haze blanketing parts of Indonesia, igniting the tanker & killing 10 people. Oil leaked from the tanker, caught fire and engulfed a nearby cargo ship. At the time, visibility in the area had been cut to 50 yards by the smoky haze, said a port official in Pekanbaru, 500 miles northwest of Jakarta. All the dead were crewmen on the river tanker. (9 August)

The Dutch general cargo vessel M/V NOUAKCHOTT (2,800 gt) grounded at Punta Tenefe, Grand Canary, on Aug 4. Divers are to inspect vessel before a further refloating effort during the evening of Aug 5. (August 7)

The Cyprus M/V Fontana suffered engine damage after a collision with Vietnamese freighter M/V Saigon-1 at the outer anchorage of Bangladesh's main Chittagong port on 7 Aug. The local agent of Fontana, said: ``Fontana has been badly damaged and its engine broke down. We will seek compensation.'' (August 7)

The North Korean cargo ship M/V Jang Dae San. The Pakistan Navy rescued 43 crew members from the ship which ran aground 90 miles off Karachi in heavy weather. All the crew were brought safely off the ship by helicopters & were taken to shore. (1 August)

The Greek-registered M/V Pel Mariner sank off the Turkish coast after colliding with M/V Pel Ranger, near Bozcaada, an island near the entrance of the Dardanelles Strait which links the Aegean to the Sea of Marmara.. Two crew members are missing. The Coast guard and ships in the area rescued 10 other crew members from the Pel Mariner, which was carrying empty containers to Turkey's Gemlik port from the Greek port of Iraklion. (27 July)

The Chinese bulk carrier M/V Changyu sank after colliding with M/T Mee Yang, a South Korean chemical tanker near the port of Nantong on the eastern Yangtze river. Thirty 3 crew members had to be rescued from the 1975-built, 12,108gt bulker which was carrying 18,000 tons of coal. The 1993-built, 1,590 gt Mee Yang suffered minor damage & is now berthed in Jiangyin pending a survey. (26 July)

NOTE: The historic dangers of carriage by sea continue to be quite real. Shippers must be encouraged to purchase high quality marine cargo insurance from their freight forwarder or customs broker. It's dangerous out there.

OUR "D" Section: FF in Cyberspace

7. The Cargo Letter "Cyber Ports Of Call"

Here are our suggested world wide web sites of the month for your business, your information and your amusement.

ComData Project .......... use your motor truck back haul as "18 Wheels For Charity". You will haul hope. 

Con-Way Transportation Services ......... announces it's new & improved web site. Customers can now receive as many as 10 images within a single request. Images can be viewed on screen, faxed or e-mailed anywhere. The speed and responsiveness of FastDoc has also been increased. Con-Way was the first LTL motor carrier to have a site on the Internet in August 1995. 

NIOSH Pocket Guide & Document Collection ........ is a searchable electronic format on CD-ROM with detailed chemical hazard information from the National Institute for Occupational Safety & Health (NIOSH) on more than 670 chemicals, as well as over 250 MB of supplemental safety information: NIOSH Manual of Analytical Methods, International Chemical Safety Cards, and various other publications. 

e-Parcel .......... for large E-file delivery. In English, Japanese & Macintosh. 

AS & E ....... makers of BodyScanner & cargo scanning devices, as adopted by airports & U.S. Customs 

Modern Shipbuilding Technology Demonstration. The event will take place September 21-22, 1999, at the Hyatt Regency Crystal City in Arlington, VA. 

Gibraltar .........meeting place of continents. Interesting new editorials. 

Marine Publishing Co ........... fleets & lore of the Great Lakes 

Port of Felixstowe ......... articles of current interest by Pat Gardiner 

TimeBills.com ........... the 1st ever web service for small businesses & solo practitioners that provides a convenient way to track time & expenses and create quality invoices. Eliminates complex software downloads. Professionals can generate quality invoices in under a minute and send them directly to clients via automated E-mail, fax or mail. The company is offering a free three-month trial. 

Internet Search Engines ....... featuring our The Freight Detective 

Maritme Employment Opportunities 

Employment Opportunities In Travel  

Guru.com ........ career help for the independent professional.

Commercial Hovercraft 

Investigative Resources 

Can The Export of Congo River Water Be Economical In the 21st Century? ........ water as cargo.  

Digital T.V. & Phone On Same Line ........ 400 channels in your future. 

Legal Seminar For Doing Business On The Web ........for attorneys, 14 Oct., at Seattle. /

OUR "E" Section: The Forwarder/Broker World

8. Changes To The IATA Air Waybill After MP4?

• We Asked IATA

Now that the U.S. has joined a growing number of nations in adopting Montreal Protocol 4 to the Warsaw Convention, we questioned whether the International Air Transport Association (IATA) is planning any changes to the standard IATA air waybill

In answer to our question, Les Ashton, IATA Manager of Cargo Procedures, told The Cargo Letter on 14 July:

"There have not been any changes made to the air waybill at this time as a result of MP4. The Conditions of Contract which appear on the reverse side of the air waybill is the portion immediately affected. A Cargo Legal Working Group is reviewing this aspect and will be putting forward their recommendations to the Member airlines in the near future. Also, a major consideration is the fact that not all countries have ratified MP4 and it has to be determined what process or processes will apply between those countries which have and those which have not (ratified).

"For your information, another initiative that has taken place is that a Task Force of member airlines has identified all areas of the handling process involving the air waybill. Sub-groups will review each of the identified areas and develop detailed recommended processes under MP4. This could result in changes to the air waybill as well. It is not anticipated that any of these changes will occur this year."

9. Technology Key To Year 2000 Air Vision

• IATA Eyes The Future

None of us can afford to be passive observers of the global information system. Decisions made now on the shape and scope of worldwide IT are key to the efficiency and viability of our industry, its future growth - and its ability to attract capital on reasonable terms,” said IATA Director General Pierre J. Jeanniot.

Jeanniot was speaking on 9 Aug. at the opening of the Aerovision 2000 Symposium in Vancouver, Canada.

“Part of our future vision is a scenario in which passengers holding a multi-function smart card, including passport, visa and biometric ID data, could enjoy a truly hassle-free experience, from check-in to final clearance at destination.”

Jeanniot stressed that aircraft and ATC were equal components of the vision.“Another important development would be centered on aircraft movements - and would link, on a real-time basis, airlines, airports and ATC’s. A sort of gate-to-gate set of data bases and networks, which would permit timely, efficient optimization of aircraft use and maintenance, as well as optimization of airports and ATC resources, including CNS/ATM.”

He continued, “We’ve moved in a few short years from terrestrial TV, to satellite TV, linked PCs, global satellite communications, the “optic fibre community” - and the Internet. The trick will be to make the smartest use of it all.”

“For example, through IATA, airlines are using the connectability revolution to define standards on Internet sales intermediaries, to control fraud through databases of stolen or forged tickets, to provide information on airport geography and flight obstacles, to provide up-to-date knowledge for our Members on the state of Y2K readiness of airports & ATS facilities - and to promote the air traffic management revolution offered by satellite-based navigation.”

"The technology is here, to accomplish a sea-change to the way we do our business, enhance our safety and dramatically improve the efficiency of the entire aviation product delivery.

Assembled from wire stories, the Associated Press, Reuters, Hong Kong Shipping News & other world sources.