The Cargo Letter

THE CARGO LETTER [348]
Air & Ocean Freight Forwarder - Customs Broker News
26 January 2000

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.'' Quite sadly, we have new Pirate news & a great deal of loss at sea.

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.

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Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel, forwarder/broker attorneys at LAX.

INDEX to The Cargo Letter:

OUR "A" Section: Trade, Financial & Inland News
   1. Freight Forwarder Trade Briefs
   2. The Cargo Letter Financial Page 
OUR "B" Section: FF World Air News
   3. Freight Forwarder World Air Briefs
OUR "C" Section:  FF World Ocean News
   4. FF World Ocean Briefs
   5. The Cargo Letter Cargo Damage Dispatches
      * Back By Popular Demand
OUR "D" Section: FF in Cyberspace
   6. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
   7. Port Truckers Ruled Independent
      * All U.S. Ports Look On
   8. Pirate Attacks Up 40% For 1999
      * Reuters Continues The Watch

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

1. Freight Forwarder Trade Briefs

• Transport Professionals Were Ist To Greet 2000 ............ as the crew aboard Cathay Pacific flight CX888 from Hong Kong to Vancouver were some of the 1st people in the world to travel into the new millennium, before returning a few minutes later to the previous century. The plane departed from Hong Kong Int'l Airport at 1.42 PM Hong Kong time on Fri. Dec. 31, with approximately 120 passengers on board. The aircraft flew into Jan. 1, 2000 at a point just west of the Int'l dateline (longitude 180 degrees) over the mid-Pacific Ocean. Minutes later, it flew over the Int'l dateline back into 1999. The aircraft was scheduled to arrive in Vancouver at 2055 local time, giving passengers plenty of time to prepare for a 2nd and more lasting celebration in North America. Before the flight departed Capt. Malcolm Lewendon said: "It's quite exciting to make a little piece of history like this. But most of our passengers will probably slept through it." indeed, we all did.
• We Found One! ........ as that rarest of all world problems, a Y2K shipping glitch, has been identified. During the 1st week in Jan. Brazil's key Port Santos experienced a computer hiccup in its customs process related to the so-called Y2K bug, but authorities said it was not hampering South America's busiest seaport. The port, through which 35 million tons of cargo move each year, had reprogramed its computers last July to read dates with a 4 digit instead of 2 digit number for the year to avoid the bug reading "00" as "1900" and not "2000." But after Dec. 31, the new program failed to recognize customs registrations issued from the old system. For some fun check out the Y2K Mistakes page: http://go.to/y2kmistakes
• 3PL Follows The Wave .......... as third party contract logistics (3PL) services grew 16.5% in 1999, according to Armstrong & Associates Inc., a logistics management consulting firm. The results were based on an analysis of 38 industry leaders accounting for more 50% of U.S. revenues. The consultant expects overall growth to continue in the 15% to 20% range for the next 3 to 4 years. Many Fortune 500 companies have not outsourced transportation, warehouse & inventory management functions that are not parts of their core competencies. In addition, Armstrong points out that many small & midsize companies are the right size too have their integrated supply chains managed by a single, contract logistics company. E-commerce fulfillment will expand the roles of traditional 3PLs and merger & acquisition activities will continue to change the 3PL landscape, the consultant said. Domestic management & dedicated contract carriage grew 18% while warehouse-based integrated services grew 16%. Non-asset-based Int'l transport management grew at 11%, as the Asian economic difficulties eased. U.S.-based 3PLs earned US$46B in total revenue. New profitability was 5% and net 3PL revenues were US$25B, Armstrong said.
• Indians Out of The Doghouse .......... as the U.S. Commerce Dept. will remove sanctions against 51 Indian companies. The sanctions were imposed last year after India exploded nuclear devices in retaliation for similar detonations by Pakistan. Commerce said it decided to take this action based on a recent decision by the Clinton Administration to focus more on Indian companies which have direct ties to nuclear weapons development. The rule will take effect once published in the Federal Register. The Administration says it will continue to adjust the list of sanctioned Indian & Pakistani firms & products. The list of Indian firms removed from Commerce's sanctions list may be viewed on the web site. http://www.bxa.doc.gov/entities/the51list. html
• South Out of Hock ......... as South Korea's exports are expected to rise to US$157B, up 8.9% from last year, while imports are likely to increase to US$144B, 20.3% higher than last year, the Commerce, Industry & Energy Ministry said. It said the trade surplus would be lower this year due to a sharp rise in imports as a result of an expanded economy. Exports last year increased 9% to US$44.2B while imports jumped 28.3% to US$19.7B for a trade surplus of US$4.5B for the 2nd consecutive year, following surplus of US$9B in 1998.
• The Philippines Recovers ........... as 1999 has seen a 19% rise in exports over the previous year. From Jan. to Nov. the figure was also 19% up which indicates a constant & healthy export industry. Components & electronics accounted for 52% of the goods exported & in Nov., these were up by 16% to stand at US$1.59B. Exports in total rose by over US$3B for the 1st 11 months of the year bringing the total figure up to over US$32B
• Brazil Reconsiders .......... as it has decided to drop plans to tax all Int'l freight by as much as 15%. The Baltic and Int'l Maritime Council, a group of 2,500 ocean carriers & ship agents, appealed to the Brazilian government to rescind these plans. "The tax would have had adverse effects on both imports & exports in the country," said Thomas Timlen of BIMCO. Tax legislation introduced earlier this year calling for a withholding tax of 25% on payments made from Brazilian shippers to foreign carriers remains in effect. "Fortunately, we have received no reports of any carrier facing such large tax deductions," Timlen said.
• Don't Take Any Wooden Sucres ......... as President Mahuad of Ecuador announced on 10 Jan. the decision of his government, backed by most political parties in the country, to "dollarize" its economy. Consequently, under his fast track plan the Sucre would have been replaced in 30 days by U.S. Dollars drawn from the country's Int'l reserves. The Sucre would have remained in circulation at a parity rate estimated by Mahuad at 25,000 Sucres per Dollar. The radical move came after a critical year for Ecuador's economy which forced defaults on current, Brady & Euro bond foreign debt & saw the Sucre's 500% devaluation. Well, the public was so overjoyed with the plan that President Mahuad was overthrown last week & a new government installed. World Sucres collectors have announced an end to hoarding.
• Yankee Go Home? But You Others Stay? .......... as U.S.S. Tortuga & U.S .S. Nashville with 450 Marine & Navy engineers are being held back from a flood relief mission to Venezuela, whose president said he doesn't want help from American troops. A Pentagon spokesman said on Jan. 11 that the Tortuga was being turned back on route to Venezuela & the Nashville would not leave Moorhead, NC, after President Hugo Chavez told reporters he didn't want the assistance. Meanwhile, U.S. relief efforts with 4 helicopters & water purification units continues with about 120 U.S. soldiers involved in those operations. At the State Dept., spokesman James P. Rubin said, "We're asking the government of Venezuela for clarification." He cited a Dec. 24 letter in which Venezuela's defense minister "specifically requested the assistance of U.S. military engineers to open up a humanitarian corridor for flood-ravaged coastal communities." Chavez's government earlier welcomed U.S. help, including soldiers who have been operating water purification facilities and flying, Blackhawk helicopters, C-130 cargo planes & a C-5 Galaxy cargo plane. The Tortuga & Nashville were to transport bulldozers, tractors & engineering equipment along with the troops to operate and maintain them. Pres. Chavez told reporters that while Venezuela still seeks money, equipment and other materials, additional relief workers are not needed. Chavez, a former army paratrooper elected a year ago, has been accused by opponents of using the floods & killer mudslides to consolidate his power. In the chaotic aftermath of the disaster, he has eliminated Congress, replaced the Supreme Court & appointed other top officials. Since his election, Chavez has improved relations with communist Cuba & has been critical of U.S. global influence. He earlier refused to allow U.S. planes to fly over Venezuela in anti-narcotics operations. We think that perhaps Persident Chavez should begin to expand his collection of Sucres. On 11 Jan. Atlas Air donated the 1st jumbo freighter relief flight into Valencia, Venezuela to assist victims.
• UrMexFTA? .......... as Mexico has signed a new trade agreement with Uruguay. The countries have concurred on particular trade aspects allowing both of them relative freedom on both way trade taxes. Mexico will now be free to export 78% of its products to the South American country exempt from customs duties, while 96% of imports into Mexico from Uruguay will enjoy the same privilege. This individual agreement between the countries stems from the inability of the North American Free Trade Agreement to form closer ties with Mercosur. NAFTA consists of Mexico, Canada & the U.S., while Mercosur comprises Uruguay, Paraguay, Argentina & Brazil.
• South Pacific For Free? ........... as a plan to abolish import taxes later this year is under consideration by the Marshall Islands. Finance Minister Tony deBrum said that if adopted the measure would help bring the country in line with a proposed South Pacific Free Trade Zone & eliminate the rising costs of enforcing the import taxes. They also want to concentrate on those stamp & coin ventures.
• Jordon To WTO? ......... as the 17 Dec. Meeting of the General Council agreed to the accession of Jordan to the WTO. The Hashemite Kingdom of Jordan concludes in this way 5 years of negotiations during which it has undertaken major reforms of its economy, laws & institutions in order to promote greater trade & investment. It has also adopted a national program for further liberalization of its economy.
• DP - AEI Deal Gains Approvals .......... as Deutsche Post AG, the expansion-minded German postal service & logistics group, has received all U.S. regulatory approvals for the US$1.14B takeover of Air Express Int'l Corp. The acquisition was approved under the Exon-Florio Statute & under U.S. Dept. of Transportation regulations. The DOT has approved AEI's application to register as a foreign air freight forwarder under section 721 of the Defense Production Act, commonly known as the Exon-Florio Statute. Deutsche Post & AEI had earlier announced that the transaction had also been cleared under the Hart-Scott-Rodino antitrust procedure. DP & AEI are still awaiting clearance from the European Commission which is expected by early Feb., assuming Deutsche Post AG has not acquired the European Commission by that time. For the full story see The Cargo Letter [347].
• They're A Little Short After Christmas .......... as U.S. Customs has decided to delay the release of a solicitation for bids from information systems developers to develop its future computer system. Customs stopped the release of this solicitation, scheduled for Jan. 5, because the agency lacked funding for the Customs modernization efforts. In addition, port visits for information systems developers in Laredo, Texas & Los Angeles/Long Beach, Calif. planned for Jan. 18-21 will be rescheduled. Customs was recently denied US$15M in emergency supplemental funding by the Clinton Administration and Congress to run the solicitation process and maintain its ACE prototype, National Customs Automated Prototype. The agency continues to negotiate with congressional and administrative staffers for the funding, and hopes to release the solicitation by the end of the month. Customs believes that the best way to replace its aging Automated Commercial System is by contracting with the private sector. The US$1.8B Automated Commercial Environment is expected to take 4 to 7 years to build if funding begins in fiscal 2001. Information regarding the bid process will be published at Customs' website. http://www.customs.gov/contract/contract.htm
• Country of Origin Debacle ........... as on 24 Jan. the U.S. Supreme Court rejected the appeal of a New York man whose antique Italian gold platter was confiscated by the government over a false statement on a customs form. The court, without comment, turned away arguments that forfeiture was an excessive punishment & violated his due-process rights because someone else was responsible for filling out the customs form. Michael H. Steinhardt, an investment fund manager & antique collector, agreed in Dec. 1991 to buy a 4th Century B.C. antique gold platter of Sicilian origin for US$1.2M from a Swiss art dealer. A New York City art dealer who acted as intermediary brought the platter from Switzerland to New York. A customs broker prepared the entry form that listed the platter's country of origin as Switzerland and its value at US$250,000. Four years later, the Italian government sought help from the U.S. government in recovering the platter. Italian law presumes that antique items belong to the government unless they were privately owned before 1902. U.S. Customs agents seized the platter from Steinhardt's home in 1995, and the government began forfeiture proceedings. A federal judge ordered the platter forfeited on grounds it was illegally imported because the customs form falsely said it was from Switzerland. The judge said the platter belonged to Italy & therefore should be considered stolen. The 2nd U.S. Circuit Court of Appeals upheld the ruling based on the false statement. Steinhardt's lawyers said the appeals court should have required proof that the platter would not have been allowed into the country if the customs form had been correct. Instead, they said, the appeals court required a lesser showing that the false statement would tend to influence customs officials. Steinhardt's lawyers also said forfeiting the platter was an excessive fine & violated his due-process rights because he was an innocent party. Justice Dept. lawyers urged the justices to reject the appeal. They said Italy was harmed "by the loss of a valuable antique artifact" and that the purpose of the forfeiture was to return the antique to that country. Editors Note: The unidentified Customs Broker has been entered in the witness protection program & was unavailable for comment.
• They May Now Come To The Mountain ........... as U.S. Customs has relaxed its rules slightly in order to speed up port procedures, with inspectors no longer required to board vessels when checking vessel documentation. Instead, agents will be allowed to come ashore to present the required documentation. Including overseas ships, U.S. Customs deals with around 100,000 arriving vessels every year. It is expected that the introduction of the new procedure will greatly speed up the documentation process. Documents that crew are required to take to the Customs office upon arrival include clearance of vessel to a foreign port, crew effects declaration, ship stores declaration, general declaration & master's oath of vessel in foreign trade. Customs has said that it intends to use the money saved for enforcement purposes.
• Emery Follows DHL To Customs ......... as the customs brokerage unit has announced that its `ImPower' program is now available in a web-based application, similar to that launched by DHL last month (see The Cargo Letter [347]). The ImPower program, developed in-house, monitors shipments cleared by Emery's U.S.-based customs brokerage offices, regardless of carrier or mode. Functioning as a database, it provides detailed cargo reports as well as entry & billing information, which is updated twice daily by Emery. The web-based version of ImPower enables customers to access vendor & carrier compliance information, monitor port-of-entry activity and report NAFTA activity. It will provide the importer with a mechanism for reasonable care, responsible supervision, vendor invoice accuracy & control of remote location compliance from a corporate perspective. Emery has also launched a new customs brokerage program to assist the growing number of manufacturers who now must assume duty costs & customs compliance for Int'l shipments as part of doing business with their customers. Emery developed it's "Non-Resident Importer of Record Program" in response to a significant migration from the traditional term of sale "free on board" (FOB) to "delivery duties paid" (DDP). DDP is an internationally recognized term of sale used to define cost responsibilities & transfer the risk of goods shipped in Int'l trade. http://www. emeryworld.com
• Staying With The Program? ........... as the U.S. Fish & Wildlife service has come to an agreement with the U.S. Customs regarding the Automated Broker Interface. Initially the Fish & Wildlife Service complained that the ABI service, which deals in the exchange of shipment data, was not adequate & did not supply enough information regarding imports. This, it complained, had the direct result of hampering its efforts to implement enforcement work. Fish & Wildlife complained that it would no longer be using the ABI because of the inadequacy and, in addition, there was the suggestion that the ABI was not cost effective. U.S. Customs have considered these points & have agreed to work with the Fish & Wildlife Service during the next 90 days in order to improve the ABI. If, with the double effort, Fish & Wildlife is still dissatisfied with the ABI then it will be free to chose a different method of operation. Customs says that most problems with interagency exchanges of shipment data today will ultimately be solved by the development of the agency's new umbrella system, the Automated Commercial Environment.
• UPS As Forwarder-Broker? ............as "ONE-STOP" service for shipping & brokerage between Hong Kong & the U.S. has been launched by United Parcel Service and will be aimed at apparel, footwear & fashion. UPS will move goods from Hong Kong to either New York or L.A. using P&O Nedlloyd on the former route & Transpacific Lines on the latter, with rail movement to New York. UPS is effectively acting as a freight forwarder in this regard, handling all aspects of transportation with the relevant customs clearance & final delivery. A UPS spokesman said this was the company's 1st foray into the full service customs brokerage service. The HK office of UPS will handle all arrangements from pick up, sea transport, entry through U.S. Customs, until door delivery. Perhaps UPS should join the NCBFAA. The support would be appreciated.
• TT Club Warns Shippers To Declare Value ......... as the Through Transport Club says that transport operators & shippers may be insufficiently covered against the loss of high-value cargo. The warning follows reports that the theft of computers & other high-tech commodities has increased. "Manufacturers & shippers trying to reduce these losses have developed a variety of initiatives, including new contract language & audit systems that require carriers to take additional steps to bolster cargo security," the Club said. Some shippers who believe that standard liability limit levels in transport operators' contracts are too low "are seeking to make cargo value declarations on the carriage contract documents," the warning said. But this cargo value declaration by shippers expose carriers to additional liability risks for cargo theft, the insurance club warned. The Club urged shippers to discuss this issue with their transport providers and, subject to negotiation, be prepared to pay higher transport rates for declared value cargo. While the warning is quite valid, "declared value" will not protect shippers in all respects. The better course is for shippers to arrange quality cargo insurance from their freight forwarder or logistics provider. It should also be noted that so called "special contracts" between shippers & forwarders to increase liability limits can, in some circumstance, work to voi d the forwarder or carrier liability insurance coverages. Please check with your transport legal advisor or insurance broker before commencing any new liability arrangements. We stress the importance of this. Do not arrange your new customer service program alone, because when the 1st problems arise you will have quite a bit of company from the customer's law firm stopping by.
• Panalpina Calling ......... as the Swiss forwarding & logistics group, is introducing shipment tracking & tracing of shipments by mobile phone. The new functionality uses wireless application protocol, which enables customers to dial into the Internet by telephone & access Panalpina's consignment tracking system PanTrace. The only prerequisite is that they use a WAP-compliant mobile phone. Panalpina said the technology is based on WAP standard 1.1. There is no word on reports that cargo tracking will now add to the list of modern day restaurant noise annoyances. Further to it's "E" interests, Panalpina has acquired Avalog AG, a Swiss logistics information technology firm, from SAirGroup, the parent company of airline Swissair. Based in Glattbrugg, near Zurich, Avalog supplies logistics consulting & management services. Its activities include developing information technology products. The company's role within the group will be to design and implement new logistics & supply chain management solutions.
• Pacer Int'l Gets Conex ........... as the North America freight transportation & logistics provider has expanded its transloading, local-trucking, warehousing and its intermodal marketing activities, through a merger with Los Angeles based Conex Global Logistics Services, Inc. Established in 1977, Conex becomes the 8th logistics firm to come into the Pacer group in the last 24 months. Its operations are centered in L.A., San Diego, & Calexico, Calif.; Seattle & Atlanta. It handles some 225,000 loads annually.
• Schenker Gets Chemical ........ as Germany's Stinnes AG, the parent company of Schenker, has acquired the chemical distribution & logistics firm Neuber GmbH. Stinnes said that the acquisition of Neuber will substantially expand its network into the Eastern European market for chemical logistics.
• Proving It's No Fly By Nite ........ as U.S. trucker Overnite Transportation Co. filed suit Tues. in U.S. District Court in Jackson, TN., naming Int'l Brotherhood of Teamster President James P. Hoffa & other executives of the union as defendants. Overnite alleges a "pattern of racketeering activities" that includes 57 acts of attempted murder & 131 acts of extortion, as well as numerous violations of Tennessee law, with intent to "put Overnite out of business if Overnite and its employees do not agree to collective bargaining representation" by the Teamsters. The Teamsters have been striking against Overnite Transportation, the nation's largest non-union LTLcarrier, for about 3 months. The suit seeks damages in excess of US$5.2M for security expenses, damage to Overnite property, damage to the property of Overnite employees for which Overnite has provided compensation & costs of replacing workers who missed work due to lawlessness, Overnite said. Teamsters side told: http://www.overnite.org/
• USFreightways Corp. Gets Transport ........ as it has agreed to buy Transport Corp. of America Inc.for about US$149M in stock. Transport Corp. will become a subsidiary of USFreightways, which owns 5 other regional trucking companies.
• DOT Takes Cyber Cash ........ as U.S. Dept. of Transportation staff has developed what the DOT calls the 1st federal government online payment site. The web site, called "Do It Yourself" allows DOT customers to fill out forms online and pay immediately using a credit card. The web site eliminates errors due to multiple data handling, speeds payment processing & product or service delivery and avoids forms & checks from being misplaced or stolen. http://div.dot.gov
• HKG Quota Warning ......... as Hong Kong Customs & Excise Dept. issued a written warning to garment manufacturers this month that making false a statement in an application for a Textiles Export License & Certificate of Hong Kong Origin is a serious offense. Under the Import & Export Ordinance, the maximum penalty for the offense is a fine of HK$500,000 & imprisonment for 2 years. The warning was given after a local factory & its subcontractor were allegedly found in breach of the ordinance when intending to export about US$1.77M worth of garments to Belgium under the Hong Kong textiles quota. It was found that the garments were actually made in the mainland. The Dept. takes a serious view of textiles' origin fraud cases & will act vigorously to combat illicit textiles transshipment.
• Bureau Veritas Buys U.S. .......... as it has agreed to the acquisition of Unicon Int'l & Neptunus, the San Francisco headquartered groups specializing in intramural equipment and cargo management services for the transport & logistics industries. The acquisition will enable Bureau Veritas, a leader in the certification & statutory inspection of containers & intramural equipment, to broaden its client base. Unicon was founded in 1981 and has performed over 12,000,000 surveys during this period. Covering 150 ports in 45 countries. Unicon's product lines include the full range of intramural equipment, life cycle repair management activities as well as supply chain inspection service for dry & perishable commodities.
• New Circle Chiefs ........... as Circle Int'l has announced several executive management promotions. Randy T. Clark has been named Exec. V.P., operations planning & logistics. In his new position, he assumes worldwide responsibility for operations planning, new business integration, global pricing & product development and Circle's Logistics & Supply Chain Management group. He replaces Kim Wertheimer, who left to become Exec. V.P. of North American Int'l business development for Eagle USA Airfreight. Paul H. Graham replaces Clark as Exec. V.P. & COO for North America. Graham, a 20-year veteran, has served as president & COO of Circle's Asia Pacific region since September 1996. Clark & Graham are based at Circle's SFO headquarters.
• Hellmann Worldwide Promotes ........ as Jim Parker, General Manager of Hellmann’s Tampa facility has been appointed Regional Manager, Southeast, Hellmann USA. Parker came to Hellmann as terminal manager in 1988 from Steevens Diz Int'l when Hellmann purchased that company.
• Nematodes Get Stay of Execution ........... as China has introduced a 60 day grace period before strict enforcement of new quarantine measures imposed on imported Japanese & U.S. pallets made from fiberboard, plywood & woodboard. After authorities have complained that vermin & pests were entering the country through the softwood packaging used for imported cargo, it was decided that starting Jan. 1 such softwood packaging from Japan and the U.S. be heated to 56 degrees centigrade for half an hour. Such treatment would, the authorities claim, kill the pinewood nematodes sometimes found in pallets from both the U.S. & Japan. However the enforcement of an import ban on items not so treated will not be strictly applied until the beginning of March, even to those cargoes without required documentation detailing the pallets' heat treatment. Exporters from the U.S. & Japan protested against the implementation of such a ban and the speed at which it was introduced, 2 months, through political bodies & demanded it be dropped. In response the Chinese authorities sought Japanese governmental recognition of pinewood nematode worms as vermin & softened their stance somewhat. There was no response from the Nematoades. It is thought that infested pallets will be discarded in China at the importer's expense. Hong Kong is exempt from the ban, with hardwood pallets continuing to be disinfected only.
• No Forwarders For These "Importers" .......... as smuggling beer into Britain across the Channel is becoming one on the fastest growing, retailing sectors this year, albeit part of the black economy, with business up nearly 12%, according to a recent report. The survey by the Brewers & Licensed Retailers Assn. (BLRA) estimated that more than 100,000 heavily loaded vans carried largely illegal beer across the Channel from Calais in northern France during 1999.
• Next Year They'll Add A Fourth Wheel ......... as soon Dutch postmen will trade in their bikes for a newly developed tricycle. PTT Post has purchased a few hundred of these, and expects there will be Int'l interest in this conveyance for distribution in urban areas. With this new trike the postman can take along more mail & parcels, while it also saves energy. The tricycle is a Dutch design. Its appearance is striking, but it is also said well thought out ergonomically.
• Be Sure To Properly Mark You Contraband ........... as an elastic hair band used to mark a case at Cairo Int'l Airport aroused the suspicion of customs officials & led to the discovery of smuggled Viagra pills worth US$145,350 on Jan 13. An Egyptian passenger made a deal with a tourist company representative that he would leave the case with the group's bags because he believed customs were more lenient in their dealings with tourists. The tourist representative agreed to deliver the case later. When customs officials picked out the case with the hair band and asked for the owner, no one claimed it. They opened it and discovered 10,000 Viagra tablets, which are used to enhance sexual potency. The tourist representative was detained for questioning & confessed to the deal. The hair band has not been claimed.

2. The Cargo Letter Financial Page

• AMR Corp., parent of American Airlines. DOWN with 4th quarter net earnings of US$105M, or US$0.69 per common share diluted. This compares to net earnings of US$167M, or US$1.00 per common share diluted in the same period in 1998.
• American Freightways. UP with operating revenue for the quarter ended Dec. 31, 1999, to US$306M, up 20.1%.
• Burlington Northern Santa Fe Corp. UP with record 4th quarter 1999 earnings of US$0.69 per share on a diluted basis, a 10% increase. Net income increased US$19M to US$315M.
• Continental Airlines. UP with 4th quarter net income of US$33M ($0.48 basic & $0.47 diluted earnings per share), exclusive of previously announced gains & charges. This exceeds First Call's consensus estimate of $0.39 diluted earnings per share. The company reported its 5th straight year of profits, with annual net income of US$359M. The company ended the year with its stock having appreciated 32.5%, highest of all the major U.S. airlines.
• Eagle USA Airfreight. UP with record revenues & earnings for the 1st quarter ended Dec. 31, 1999. Revenues for the 1st quarter increased 29% to US$187.4M. Net income for the quarter totaled US$10.0M, a 29% increase. Diluted earnings per share for the 1st quarter increased 22% to $0.33.
• Fritz Cos. Inc. UP as net income for the quarter ending Nov. 30. was US$9.1M, up 6.7%. Net revenues (revenue less direct transport costs) improved 4.6% to US$160.7M, while revenues jumped 11.7% to $426.5M. Operating expenses rose 4.8% to US$145.3M, due to a 6.9% increase in labor expenses and a general & admin expense increase of 1.4%. In related news, Richard Skidmore has just been named as V.P. of Human Resources, having held that position previously at First Nationwide Bank (now California Federal), USL Capital, & Associates Corp.
• Malaysian Airline System Bhd. Up as it appears to have weathered its most turbulent spell but the national carrier is still not in the clear. MAS has recovered smartly from deep losses last year, posting a net profit of US$72.4M in the 6 months to Sept. 30, against a net loss of about US$118M in the same period in 1998.
• Northwest Airlines. UP with 4th quarter operating profit of US$94M. Revenues for the fourth quarter increased to US$2.555B, an increase of 15.5% over 1998. Quarterly operating expenses were US$2.461B, an increase of 2.4% from 4th quarter of 1998. Northwest experienced a 25% increase in fuel price year-over-year; absent the increase operating expenses declined 0.3%. For the full year, the Company reported an operating profit of USD 714 million. Revenues for the full year 1999 increased 13.6% to US$10.276B. Operating expenses for 1999 increased 3.5% to US$9.562B.
• Northwest Cargo. UP as revenue increased 18.2% to US$221M in the last quarter & grew 14.4% to $725 million for the year. Cargo ton miles (cargo weight carried multiplied by the distance it traveled) increased 17.9% to 679 million CTMs in the 4th quarter, spurred by a strong peak shipping season. For the year, CTMs jumped 19.5% to 2.3 billion, reflecting economic recovery in Asia.
• Southwest Airlines. UP with net income for the year ended Dec. 31, 1999 of US$474.4M, an increase of 9.4%.
• USFreightways Corp. UP with record net income for the 13 weeks ended Dec. 31, 1999 of US$30.7M, equivalent to US$1.11 per share (diluted), a 52% increase over same period 1998.
• Forward Air Splits ......... as its Board of Directors authorized the splitting of Forward Air's common stock on a 3 for 2 basis for shareholders of record on Jan. 21, 2000. (Nasdaq/NM:FWRD).
• MAS Jump ........ as the price of shares in Malaysian Airline System (MAS) rose by well over 13% on 11 Jan. following market rumors that KLM is to take a stake in the airline.

OUR "B" Section: FF World Air News

3. Freight Forwarder World Air Briefs

• Volume Up & Rising ......... as air cargo traffic increased by 8.5% last Sept. according to statistics published by Geneva-based Airports Council Int'l. World airport cargo traffic was 5.08 million tons, according to the survey. Asia-Pacific airports reported a cargo traffic increase of 13%, to 1.26 million metric tons in Sept. compared to Sept. 1998. Mideast airports reported a 15% jump in cargo volumes, to 200,934 tons. The Mideast was the region with the fastest rate of cargo growth in Sept. North American airports handled 2.43 million tons, an increase of 6.5%. European airports reported a volume of 1 million tons, up 9%. According to the latest survey of major airlines, airports & civil aviation authorities by the Int'l Air Transport Assn. air freight traffic volumes will rise by an average of 5.5% a year during 1999-2003. The 5.5% annual growth rate predicted by IATA is 0.2% points higher than the average growth rate it had estimated in its 1998-2002 freight forecast. Following recovery in the Asian markets, freight traffic growth is estimated to have exceeded 6% in 1999, IATA said.
• Parcel Rates Will Rise ........... as the U.S. Postal Service is getting ready to kick off the complex process of raising rates, a step that could mean higher stamp prices early next year. Major mailers have been on edge in recent months, anticipating the action many expect to be announced at the monthly meeting of the Postal Service's board of governors. Officials of the Mailers Council & Direct Marketing Assn. also said they expected action soon. Postal officials were not discussing how much of an increase would be sought. Two of the post office's main competitors - FedEx & UPS - recently announced rate increases to take effect in Feb., citing rising costs.
• Bye Bye Brussels? ........... as DHL is breathing a sigh of relief as a proposal by the Belgian transport minister to ban night flights into Brussels Int'l Airport has been scrapped. The Belgian government had planned to slowly introduce a total ban on night flights arriving or departing from the airport. Starting next year, wide-body aircraft were not to be given landing or take-off permission from between 2300 hours & 0700 hours. In 2003, a total ban on all aircraft from 0100 hours to 0500 hours would have come. Cargo carriers became dissatisfied with the move which came about due to increasing pressure from groups concerned with noise pollution from late night flights. Cargo carriers often operate during these late hours after passenger flights have stopped. Worse for DHL was the fact that Brussels serves as its European hub. DHL had feared that as a direct result of these changes it might have to move to a different European base, thereby risking the loss of about 6,000 jobs. Thousands of DHL employees demonstrated in favor of the official result last week. Bravo!
• No More Visits After The Crash .......... as Korean Air will not resume freighter service at Stansted airport in the U.K. until at least April. As reported here last month, a KAL B747-200F freighter crashed last month just after take-off from Stansted, killing 4 crew members. The plane was en route to Seoul via Milan, Italy. KAL will continue freighter service to Milan from Seoul. The Korean government has banned the airline from adding any new Int'l routes until May 2001. In an effort to solve it's problems, KAL has named David Greenberg as Exec. V.P. & chief operating officer for Flight Operations & Safety & Security divisions. He has more than 35 years of experience in aviation & served with Delta Air Lines for 28 years, last as V.P. of Flight Operations. Greenberg, a former U.S. Air Force pilot, will focus on simplifying KAL's fleet to include only 4 aircraft types: Boeing 747-400s, 777s, & 737s & Airbus A330s.
• FDX Looks Inward ........... as the parent company of Federal Express & RPS, says it will revamp its sales operations to spur domestic package growth. Domestic volume growth continued to lag at FDX's flagship FedEx unit in the 2nd quarter, raising questions that go to the core of the express company's operations. While domestic deliveries account for almost 90% of FedEx's business, average daily domestic package volume has edged up just 2.8% to 2.9 million packages this year. FDX says it needs that domestic growth rate to be in the "six to eight range." Analysts suspect e-mail and faxes are eating away at FedEx's overnight document business, but FedEx says its letter business is still growing and blamed the slow domestic growth on a yield management program that has FedEx turning away unprofitable business and on a poor sales effort targeting the package business of smaller shippers. FDX plans to reorganize its sales force & focus on winning more business from small- to medium-sized shippers. The company will cut capital expenditures by US$200M and try to save US$75M by implementing a hiring freeze. See story below.
• FedEx To Become FedEx ......... as the Memphis based FDX parent will now be known as FedEx Corp. as a result of the name change to promote the brand. The name change will also be reflected in the names of its subsidiaries. FedEx's business service, for example, will become FedEx Express. RPS will be renamed FedEx Ground. FedEx Home Delivery, the new residential delivery service, will be provided through the FedEx Ground network. Roberts Express, the expedited, time-critical delivery sector, will be renamed FedEx Custom Critical. FDX Logistics will be renamed FedEx Global Logistics. Temporary automobile storage areas will be renamed "FedEx Parking."
• Air Europa Joins The Team ........... as the a privately owned Spanish airline has signed an agreement with KLM & Alitalia to join the Dutch & Italian carriers' global carrier alliance. The 3 carriers expect to finalize a deal by April. Air Europa will enhance KLM's & Alitalia's joint network in Europe, adding Madrid to hubs in Amsterdam, Milan & Rome. Air Europa operates 46 aircraft in Spain, and internationally between the Iberian Peninsula & Europe, North American & the Caribbean. KLM & Alitalia fully integrated their European networks, including cargo, in Nov. They have joined with Northwest & Continental Airlines in the U.S.
• Singapore Airlines Down Under? .......... as it may team up with Virgin Atlantic to start a domestic airline service in Australia, analysts report. The Singapore carrier's attempt to buy a 50% stake in Australia's Ansett Airlines last June fell through after Air New Zealand said it would use its preemptive rights to stop News Corp.'s proposed sellout to Singapore Airlines.
• Continental Unto Itself? ........ as it has had had preliminary talks with Northwest Airlines about buying Northwest's controlling equity stake in Continental. Northwest purchased a 14% stake in Continental in 1998 from Air Partners LP in a deal valued at US$520M. This gave Northwest 51% control of Continental, but Northwest agreed to limitations on its voting authority in order to preserve Continental's independence. Nevertheless the U.S. Justice Dept. started a lawsuit which is pending.
• Continental & Northwest Win Battle of The Bands ........ as they beat United, American & Delta in a survey of Forrester Research on the overall major airline Web sites. Forrester gave points for customer service, booking features, fare finders & a lot of other services. Not one of the U.S. lines reached more than 60 point on a scale of 100:
  1. Continental Airlines 57.82
  2. Northwest Airlines 55.7
  3. US Airways 54.3
  4. United Airlines 54.2
  5. American Airlines 51.8
  6. Alaska Airlines 47.9
  7. Southwest Airlines 45.8
  8. Delta Air Lines 44.6
  9. America West 39.6
• United Fights Back ....... as it has introduced a free new web site based flight paging service that will proactively inform customers of flight delays, cancellations & gate information via e-mail. Messages can be automatically sent to a customer's personal computer, text-enabled cellular phone or alphanumeric pager, enabling travelers with wireless capabilities to stay abreast of schedule changes. Individual users can tailor the service to suit their preferences by choosing different options on the form, such as whether to be alerted when a flight is delayed more than 15, 30, 45 or 60 minutes. Gate information can be provided within 1 to 4 hours of the scheduled arrival or departure time. Take that Continental! http://www.ual.com
• UPS Online Record .......... as it recorded just under 3.3 million online tracking requests on Tues., Dec. 21 the highest one-day total in the company's history
• For Sale: Areolineas Argentinas ........... as the Argentinean flag carrier, is currently facing financial problems & is being bailed out by the Spanish (not Argentine) government. Until this month, American Airlines had an 8.5% stake in Aerolineas and was managing it. But after recording a US$125M loss for the year 1999, the airline decided to sell its share. So far, it has been difficult to find investors, but both Continental & LanChile have shown an interest in acquiring stakes. Aerolineas has debts of US$500M & US$300M in liabilities.
• New Asia Cargo Player....... as there will be 4 Asian destinations earmarked for service by "Thai Air Cargo", a new Thai airfreight service. Deploying Airbus A300-B4F freighters, the airline will initially operate services to Hong Kong, Taiwan, China & Bangladesh, planned to start in Sept. 2000. Good Luck!
• From The Wood To The Hood ........... as the U.S. arm of DHL Worldwide Express will move its U.S. corporate headquarters to the heart of San Francisco's financial district at the end of this year. Located downtown at 50 California Street, the new office will make DHL one of the largest corporations headquartered in the City of San Francisco. It will begin its move in December 2000, when the 5 year lease expires on its current location in Redwood City.
• 737-700C Nears Birth ........ as Boeing has now joined the wings to the fuselage of the company's 1st B-737-700C (convertible) aircraft at its Renton, Washington facility. The U.S. Navy is the kickoff customer for this newest member of the "Next-Generation 737" family, and is purchasing the aircraft to begin replacing its fleet of C-9 Airlifters. The Navy version, designated C-40A, will be certified to operate in 3 configurations: an all-passenger (121) configuration; an all-cargo configuration of up to 8 pallet positions; or a combination, or `combi,' configuration that will accommodate up to 3 cargo pallet positions & 70 passengers.
• New Ukraine Freighter .......... as it's Antonov airplane design bureau says a civilian version of its Antonov-70 military transport aircraft will be produced in 2001, allowing it to replace obsolete Soviet-made cargo planes (sorry, aren't most of them?). The An-70T, as well as the 1st generation An-70 designed more than 5 years ago, will carry 35 tons of cargo for a distance of 3,800 km (2,400 miles) at a cruising speed of 750 km (470 miles) per hour. Technical changes made in the civilian version would give the An-70T a maximum cargo capacity of 47 tons. The new aircraft would be operated by 3 crew members compared with the An-70's 6 member crew. The An-70T could receive Int'l flight certification by 2002. Officials set demand for various modifications of the Antonov plane, including the military An-70 and An-7X as well as the civilian An-70T, at about 1,500 units worldwide including about 200 to be sold in Russia and Ukraine in the next 10-15 years. In 1999 eight European countries announced an Int'l tender to choose a new mil itary cargo aircraft for their armed forces. The new plane is intended by it's makers to replace older U.S.-made C-130 Hercules cargo aircraft after 2002. Russia financed 75% of the military version with Ukraine providing the remainder. The cost is estimated at around US$40M.
• New BAX Global Customs Chief .......... as the California based logistics company has appointed Richard English, the former V.P. of import services for Air Express Int'l, to be V.P. of import Bax's U.S. Customs brokerage business.
• Aero Zambia Can Find You A Seat ............. as the grounded regional airline has revealed that it had plied the skies on the strength of a license issued back in 1998, which was not renewed last year because of hitches at a government department. The government had now refused to renew the 1998 license, effectively preventing Aero Zambia from doing business in 2000. Transport Minister Nkandu Luo told Aero Zambia she would not grant them a license to deliver an air service, on the grounds of safety. A judge has allowed Aero Zambia to fly temporarily while it seeks a court order reversing the government's decision. But its flights have been repeatedly canceled or rescheduled because of technical concerns, passengers complained. Aero Zambia flies between Lusaka & the Zimbabwean capital Harare 4 times a week, Johannesburg 6 times a week, and the Kenyan capital Nairobi once a week. It operates two B737-100s. Each aircraft's normal capacity is 108 passengers. However, the operational capacity is just 65 passengers because of cargo obligations. Troubles at the airline are said to have severely lowered its passenger load. We can't imagine why.
• Booby Prize .......as the FAA reports that America's top honor for the most delayed flight of 1999 goes to U.S. Air's flight 2762 from Washington D.C. to Atlanta. Over the year this flight was delayed a total of over 160 hours, just short of a full week. Try the train.
• Fuel Bumps Rates Up ........ as Cathay Pacific Airways Ltd. will impose a 10 euro per kg cargo fuel surcharge across Europe, effective next month. Most major cargo airlines, including FedEx, Lufthansa Cargo, Swisscargo, Cargolux, Airborne & Korean Air, are implementing fuel surcharges in Feb. U.S. carriers American, Continental, Northwest, United, UPS & TWA are already on board the raise. Expect this situation to worsen.
• Freighters As Combatants ........... as the world's 1st Airborne Laser (ABL) flying platform for the U.S. Air Force will be a B747-400F freighter. The initial test vehicle flew into Boeing facilities in Wichita, Kn. on Jan. 22 & will immediately begin 18 months of major modification work by Team ABL on its next step toward becoming the world's 1st flying missile defense system. The most visible difference will be the installation of a turret in the aircraft nose, from which a beam of laser light will emanate to destroy Scud-like missiles hundreds of miles away. Additionally, the aircraft will be modified to accept a multi-megawatt-class chemical laser, specialized optics, and computer hardware & software that will allow the aircraft to spot a theater ballistic missile in its boost phase shortly after being launched, lock onto & destroy it. The YAL-1A Attack Laser plane is the 1st to be acquired for Air Force use under the military's new commercial "off-the-shelf" philosophy. Labeled Aircraft No. 00-0001, the ABL platform also is the 1st U.S. Air Force aircraft of the new century. The plane also is the 3rd ever Boeing 747-400 built using a new fuselage assembly process that significantly reduces rejection tags & cycle time. Go Boeing!
• WHO Med Loss ......... as the cargo division of the SAir Group, Swisscargo, said on 21 Jan. that it accepts liability for the loss of a batch of scientific samples belonging to a research project sponsored by the World Health Organization. The shipment, which consisted of 5,000 frozen blood & urine samples and weighed 23 kgs, left Glasgow by truck on Nov. 18 for Edinburgh en route to Japan. "We are pretty confident it reached Edinburgh," David Harman Swisscargo's UK & Ireland manager told Reuters. The carrier said it was technically liable for only about US$24 per kg lost, but was seeking to come to a mutually satisfactory solution as a goodwill gesture. Harman said he was unable to confirm reports that the UK group conducting the research, Moneo Alimentaris Sanae, had submitted a claim for US$96.000. We'll see.
• IATA Financial Summit ......... as the annual event will be held 4-6 April 2000, at the New York Marriott World Trade Center Hotel, in downtown Manhattan. Now in its 11th year, this unique event brings together leading experts & decision-makers from the airline & finance communities, to discuss key financial issues facing the aviation industry. Geared heavily towards debate & open discussion, the summit will focus on airline relations with the investment community & latest developments in the finance markets. Case studies on Jetblue Airways, Emirates & the SAir Group will also be featured. For more information, contact Elaine Turner: e-mail:turnere@iata.org
• LAX Honors The Teapot ......... as through Feb. 28, 2000, "The Art of the Teapot" will be on display in a glass case on the upper level of Terminal One. This exhibit features artwork from 28 artists, in the latest creative interpretations of a teapot. "A Century of Toy Trains" is on display in the lower level of the Tom Bradley Int'l Terminal, south of the traveler information desk. From early cast-iron pull toys to sophisticated electric scale models, the exhibit features an internationally diverse collection & is capturing the attention of travelers from around the world. Trains will be on display through March 1, 2000. In the lower level of the Tom Bradley Terminal, inside the U.S. Customs area is a chronicle of the history of the old "Wild West Show." On display through Feb. 2000, "Wild West Show" features artifacts, posters, photos and traditional Western & Native American clothing from the Buffalo Bill Cody & the Wild West Shows collection. This display also features a life-size adult bison. The next time you visit LAX, check out the latest art exhibits in the glass cases at Terminal One & on the lower levels of the Tom Bradley International Terminal. Since 1989, LAX has displayed exhibits for periods of up to 4 months. For more information on artwork exhibits at LAX, contact Therese Sweeney at 310/646-7770.
• Flying Blind ........... as a dead drunk Moroccan commercial pilot at Amsterdam Airport Schiphol was prevented, just in the nick of time, from flying to Tangier with 125 passengers. The Boeing 737 of Royal Air Maroc was grounded together with the plane's occupants and was only able to take off the next day with a different crew. In the blood of the pilot an alcohol percentage of 2.2 was found. By our local LAPD standards, this level requires a call to the Coroner or funeral home. The Assn. of Dutch Commercial Pilots (VNV) typifies this incident as 'a shocking exception.' The airport promises that more rigid alcohol checks will be introduced. We suggest perhaps some test to see if pilots are able to walk upright.
• Volumes. >>> Hong Kong Int'l Airport continues up as 198,000 tons of air cargo were handled during Dec. 1999, a 33.7% increase over Dec. 1998. In the last month of 1998, 68,496 tons of cargo were unloaded while 79,644 tons were loaded. In December 1998, 1,118 aircraft carrying cargo landed or took off compared with Dec. 1999 when 1,495 air cargo movements were recorded, a 33.7% increase. >>> Kuwait Int'l Airport handled 12.7% less cargo in 1999 compared to 1998. The air cargo sector at the airport is still being affected by the halt in Kuwait Air cargo flights & its transport of cargo on passenger flights due to the relative economic recession in the region. During 1999, Kuwait's only Int'l airport handled 115,986 tons of cargo -- 81,181 tons incoming & 34,805 tons outgoing -- compared with 132,810 tons in 1998. >>> Macau Int'l Airport was up sharply to 6,343 tons, growing 11% compared with last Dec., although year to date cargo volume is down 18% at 53,118 tons, compared to 1998, when there was considerable spillover cargo as a result of post-opening operating constraints at the new Hong Kong airport. >>> Paris-Orly & Charles-de-Gaulle airports last year saw freight & postal traffic up 5.8% to 1.36 million tons.

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

OUR "C" Section: FF World Ocean News

4. FF World Ocean Briefs

• The Traffic In Human Cargo .......... as this month 136 Chinese on 8 ships - including 3 dead & 15 severely weakened people in a container on NYK Line's M/V Cape May from Hong Kong - have been seized at ports in California, Washington State & Vancouver. On Jan. 3, 25 stowaways were found aboard M/V California Jupiter, on a tip, when it arrived in Vancouver. The trend has sparked discussion about what can be done to curb the smuggling, from fining or seizing ships to installing container-scanning equipment at ports & strengthening efforts to detect stowaways before ships leave Asian ports. Chinese gangs are believed to be responsible for arranging to get migrants aboard ships in exchange for exorbitant fees. On Jan. 14 two men, known as "snakeheads," were indicted for allegedly attempting to smuggle 12 Chinese nationals into the U.S. aboard a cargo ship traveling from Hong Kong. A federal grand jury returned a 4 count indictment against Yu Zheng & Sheng Ding, both illegal aliens from China. Each faces up to 40 years in prison. Zheng & Ding were arrested Jan. 2 as they waited in a van parked at the Port of Seattle. The stowaways were found inside a filthy cargo container when it was unloaded from M/V OOCL Faith. Zheng & Ding charged up to US$60,000 for each person smuggled. On 22 Jan. Hong Kong's port authorities announced plans to use X-ray machines to scan containers in a bid to cut down on the human smuggling.
• Brazilian Tragedy ........ as authorities found the bodies of 10 stowaways early this month in the hold of the Liberian-flag cargo ship M/V Karonga, which was carrying bags of cocoa beans from the Ivory Coast. The victims died from gas used to fumigate the hold & preserve the beans from pests. Horrible.
• NCBFAA Continues The Antitrust Fight ............ as The National Customs Brokers & Forwarders Assn. of America will intensify its battle to end ocean carrier antitrust immunity in the U.S. Ocean Shipping Reform Act. The initial intent of maintaining carrier antitrust immunity, the ability for carriers to act collectively, was to protect what's left of the U.S.-flag carriers. But forwarders & NVOCCs say antitrust immunity is no longer needed, because most of the U.S.-flag carriers have been sold to foreign entities. The industry also says that carriers are abusing their collective powers by discriminating against small shippers, forwarders & NVOs. "Over the early months of OSRA, it is clear that our intermediary community is greatly disadvantaged by the preservation of this privilege -- one that is hardly consistent with an open and fair marketplace where we can all compete," said Peter H. Powell Sr., president of the NCBFAA in a letter to its 600 member firms. NCBFAA supports a recent bill (H.R. 3138) initiated by Henry Hyde, R-Ill., chairman of the House Judiciary Committee, to abolish antitrust immunity in OSRA. "It would revoke antitrust immunity from the carriers, making them vulnerable to Justice Department enforcement for collusive behavior & discriminatory treatment of NVOs and forwarders," Powell said. Part of the NCBFAA's battle plan is to begin a letter-writing campaign to about 20 House members with committee assignments that may influence the Hyde bill. We support NCBFAA.
• U.S. Says No To China Rate Approval ........... as the U.S. government has urged China to drop proposed regulations that would give the Chinese government authority to approve Int'l ocean shipping rates & to require that service contracts be made public. Maritime administrator Clyde Hart, in a letter to China's vice minister of communications Hong Shanxiang, said the proposed regulations "represent an unprecedented attempt" by the Chinese government "to control the practices & activities of commercial parties that collectively make up the Int'l shipping market." Hart also reminded China that opposition to its proposed shipping regulations is widespread, including the governments of the EU & Japan. The regulations, which would require tariff filing, rate approvals & public service contracts, would clash with China's major trading nations, which have moved from a regulated environment to a free market system, Hart said. "These regulations would restrict market access & competition." New regulations "should state unambiguously that the government of China will not interfere in the market for shipping services between carriers & shippers, including in particular the negotiation of freight rates and all commercial terms & conditions," Hart said. "The regulations should also authorize the practice of private service contracting that is widely used in Europe, the Americas and in Asia as well."
• Sorry .......... as shippers will not be entitled to receive interest on the Harbor Maintenance Tax refunds they receive as a result of a U.S. Supreme Court ruling that the tax -- which had been in effect for several years -- is unconstitutional as applied to exports. The new ruling, handed down by the U.S. Federal Circuit Court of Appeals, overturns an earlier decision by the Court of Int'l Trade, holding that shippers were entitled to refunds & interest. In related news, taxpayers are reminded to file their returns promptly this year, or interest will be due.
• End of An Era ........... as enactment of the U.S. Ocean Shipping Reform Act (OSRA) has seen another conference finding itself without a purpose. This time it is the shipping lines of the Trans-Atlantic Conference Agreement (TACA) who have closed their New York secretariat office. This is the second reduction in staff levels seen at TACA since OSRA virtually eliminated the role of conferences in managing service contracts between certain carriers & shippers. The conference secretariat will continue to handle agreement services for the conference & also maintain the tariff. The staffing levels will be reduced to a total of 4 based in Crawley, just outside London, next June. This is down from a combined workforce of 30 in the U.S. & Europe in 1988 & 6 in 1999. Meanwhile, members of the Japan-U.S. Eastbound Freight Conference have agreed to extend the current suspension period until at least July 31, next year. Members include P&O Nedlloyd, Hapag-Lloyd, NYK, Wallenius-Wilhelmsen, OOCL, APL, K Line, Maersk Sea-Land & Mitsui OSK.
• There Will Be No Visit To Beijing .......... as the Federal Maritime Commission's Bureau of Enforcement has argued against dismissing a complaint by NVOCC Cargo One against China's state-owned COSCO Container Lines. Cargo One charges that COSCO refused repeated requests to book agreed-upon volumes of cargo under a service contract covering freight moving from Hong Kong to U.S. West Coast ports. The NVO said it succeeded in moving only 6.5 TEUs under the 250-TEU contract. Cargo One said that COSCO claimed the reason it was unable to book the NVO's cargo because it had to allocate space to other larger shippers. The NVO also claimed that COSCO attempted to offer Cargo One space at tariff rates during the contract period. The bureau of enforcement also said that the commission's policy considerations lean toward the FMC exercising jurisdiction over the complaint, despite COSCO's argument that the appropriate venue would be Beijing, under terms of the contract.
• New Anti-Pirate Measures ........... as authorities at the Sri Lankan port of Colombo have started posting armed soldiers at night on selected cargo ships. The new service, which is free of charge to shipowners, is part of the Sri Lankan government's effort to reduce pirate attacks in its ports. The government reports that it's new anti-piracy procedures have already made a "noticeable impact." For many years industry groups have been pressing Sri Lanka to improve its port security. "This measure should certainly help to achieve this goal & should set an example for port authorities facing similar problems," said Thomas Timlen of Baltic & Int'l Maritime Council. Visit our new Vessel Casualties & Pirate Activity Database https://cargolaw.com/presentations_casualties.html
• Venezuela Recovers .......... as it's main port of La Guaira needs extensive repairs following devastating flooding which washed 500,000 cubic meters of mud into the harbor basin as well as demolishing the offices of 200 customs officials & killing customs workers. Despite fears that the port could be shut entirely, most terminals are able to operate at least partly & repair work is expected to take 45 days and cost US$1.85M. The floods wreaked havoc with the port, destroying buildings & installations as well pouring silt into the harbor.
• Carriers Join Bolero .......... as APL, Evergreen, "K" Line, Maersk Sea-Land, Mitsui O.S.K. & NYK plan to offer paperless trading in its transactions worldwide through the "bolero.net" secure Internet communications system. Evergreen took part in the bolero.net test program last year. Evergreen's vice chairman George Hsu said the system will afford his company a competitive advantage. The system will improve cash management, supply chain management and ownership transactions, as well as provide a platform on which to build further value-added services, he said Bolero is an open system, has a legal framework, has security of transactions & has interoperability. Learn more about Project Bolero at our "Legal Research Center." https://cargolaw.com/d.legal_files.html
• Destroy Those Old COSCO B/Ls! ............ as the carrier is to set free its subsidiary entities, which will begin to trade under their own names on Feb. 15. The massive Chinese State run enterprise will allow subsidiaries to trade under their own names and as a result agents around the world are being advised to sign no old style bills of lading after the transfer date. The company has given assurances that all bills of lading bearing the "China Ocean Shipping Company" or "China Ocean Shipping (Group) Company" will be sealed or destroyed by that date. COSCO Container Lines Co. has already been using its own bill of lading since 1998 & other subsidiaries are now poised to step out on their own.
• The Chinese Are Coming, The Chinese Are Coming! ......... as two editorials from World Net Daily are posted on the subject of U.S. Panama Canal Transfer last month. Did President Clinton admit that the Chinese will run the Panama Canal? We don't think so. http://www.worldnetdaily.com/bluesky_btl/19991201_xcbtl_clintons_p.shtml http://www.worldnetdaily.com/bluesky_exnews/19991201_xex_in_2000_its_.shtml
• Hyundai Pays Up ......... as it says it had paid US$6M to North Korea to compensate for the cargo ship M/V Manpok which sank in the Indian Ocean in March last year after colliding with the 4,411 TEU M/V Hyundai Duke. "We paid US$6M to North Korea in Nov. as insurance companies representing both sides agreed on the compensation in line with Int'l convention,'' Hyundai Group said in a statement. The North Korean 15,193 dwt cargo ship loaded with about 4,000 tons of cement sank quickly after having hit Hyundai's 52,000 gross-ton container carrier, which was passing through the area, about 500 miles southeast of the Sri Lankan capital Colombo. The accident left 37 out of 39 North Korean crewmen missing with only 2 survivors, who were rescued by the South Korean ship right after the accident. The group said its insurance company would cover the payment later. The circumstances of the collision have been surrounded by controversy since it happened, with reports from the Hyundai Duke stating that the Manpok cut across its bow denied by the North Korean government, who claim that the container ship had been shadowing the bulker. Responsibility aside, a true tragedy of the sea.
• DSR-Senator Can't Pay Up .......... as the European Court of Justice has rejected an individual appeal by the carrier for exemption from a bank guarantee it was required to furnish on a fine which the European Commission imposed on all members of the Trans-Atlantic Conference Agreement in 1998. A continuing dispute between TACA & the commission over these fines or their amount could go on for another "3 or 4 years," said a vice president of DSR-Senator. The dispute over an interim bank guarantee from DSR-Senator is only "part of the picture," the official said. "It is no secret that DSR-Senator was under some financial strain at the time of the TACA fine, and was reorganizing," he said. "We dropped our round-the-world service. It was obviously no time to ask a bank for a US$14M guarantee. So we appealed, initially to the Court of First Instance, and then to the Court of Justice." The main dispute was over the EC's fine in the first place, and its amount, Steffans said. He is less worried to have lost the guarantee issue on appeal, which may still have further stages to go. "I am confident we will find a way to settle with the European Commission (on this)," he said. DSR-Senator has been trading profitably since last June on a monthly basis, "but it takes time to gain strength," he said.
• What's Left Of Sea-Land Moves On ......... as CSX Lines is now operating its own services after its parent company, CSX Corp, sold most of Sea-Land Services to AP Moeller. Although it is cooperating with Maersk Sea-Land & is acting as its agent in Alaska, CSX Lines is mainly concentrating on its own ventures. It is offering a feeder service for larger ships in the Caribbean & offers eight liner services from the U.S. mainland to Puerto Rico, Hawaii/Guam & Alaska. CSX has retained 16 of the flagships that belonged to Sea-Land before the AP Moeller deal. Many of the former Sea-Land staff have moved to the CSX Lines new headquarters in Charlotte, NC. Sea-Land, it is remembered, was the former American company that invented containerization of cargo for the world.
• The Danger of Mayonnaise Shipments Told ......... as a freak accident involving a drifting freight container may have caused the British F/V Solway Harvester to sink on Jan. 11 & claim the lives of its 7 crew members. Plastic vats of mayonnaise found near the sinking site of the scallop trawler in the Irish Sea have raised the possibility it rammed into a lost freight container, the Scottish Scallop Assn. said. "There were a lot of mayonnaise bottles found round about the scene of the search so possibly they could have come from a breached container," said John Hermse, the group's secretary. "If one of those containers was floating semi-submerged and the boat rolled over the top of it, then the ship would immediately lose buoyancy, turn over & sink. So it's certainly a theory to pursue," he added. Marine investigators said 3 freight containers were lost overboard in the Irish Sea from a cargo vessel at the beginning of Nov. and & some of them were still missing. But a spokesman for Britain's Maritime & Coastguard Agency said it was unlikely a container could stay afloat for that long, and added it was too early to speculate why the ship sank. Officials are also investigating the possibility of a mine hitting and sinking the Harvester. Remains of the 71-foot Harvester were found using sonar, but bad weather has so far prevented marine investigators from starting their probe. All 7 fisherman were from neighboring Scottish villages, and the tragedy has hit the tight-knit Scottish fishing community hard. Fishing groups have said it is highly unlikely a ship the size of the Harvester would sink simply due to bad weather. Salvage experts will attempt to raise the sunken British trawler in about 2 weeks, now that the Isle of Man parliament agreed to foot the US$1.65M bill.
• Tasman Orient Line & New Zealand Unit Express Merge ............ as their Southeast Asia/East Asia/New Zealand services will be revised, effective this month. NZUE is a service managed by P&O Nedlloyd subsidiary P&O Swire. Following the change, the carriers will offer a fixed-day weekly service between Hong Kong & New Zealand. They will also provide direct calls for each voyage at Keelung, Auckland, Wellington & Tauranga.
• NVO Groups Merge .......... as the United Forwarders of Rotterdam (Unifor), a Dutch shippers' association of NVOCCs, & the Washington-based North Atlantic Alliance Assn. have said they will merge by the end of the month. The NAAA was started 7 years ago as a way for NVOs to combine their freight volumes to achieve lower rates & better service commitments from ocean carriers. The group has worked with Unifor for about 4 years.
• APL France ......... as APL, part of NOL in Singapore, will expand in France with its own agents. As of April 1, 2000, Agence Maritime et Containers (AMC) will transfer these agencies to new company APL (France) which will come directly under the European head office in London. AMC will remain subagent for the port of Marseilles/Fos. APL (France) will start operating from the existing offices in Paris, Marseilles & Le Havre & will sign on 40 employees of AMC.
• Free UK Tracking ......... as Maritime Cargo Processing, the British port community electronic data interchange provider, has introduced a free cargo tracking facility on the Internet for cargo moved via 5 major British container ports. The real-time cargo tracking operates for cargoes to/from the ports of Felixstowe, Grangemouth, Liverpool, Teesport & Thamesport, five ports where MCP runs EDI systems. The cargo tracking facility provides information concerning the carrying vessel & the status of the consignment to importers, exporters and other organizations in the logistics chain. For example, importers can check on the Customs clearance status of their cargo without the need to call the clearing agent, or they can confirm that their goods have left the port of import. The FCPS Tracker Service relies on the shipping lines allowing their information to be placed in the public domain. Most are expected to cooperate. http://www.fcps.co.uk
• COSCO Tracker ........... as the line has launched a new service in order to better provide its customers with more information on their shipments. The Internet-based provision offers cargo tracking, an electronic data interchange (EDI) booking system for paperless booking and the choice of making on-line inquiries on ship tracking & updated schedules. The company also has the ability to receive tracking reports using the global positioning system (GPS) for trucks moving cargo in mainland China. Perhaps not all the trucks. http://www.coscon.com
• New Tax Down There ......... as a new Australian goods & services tax is expected to impact Int'l shipping after it takes effect on July 1. The tax is part of an amendment to Australia's New Tax Systems Act of 1999 and will be levied at the rate of 10% and applied to all port services, such as agency fees, pilotage, bunkering & towage. Tax refunds will be available for services connected with exports. Port agents can apply for these refunds on behalf of the carriers, but could take 40 to 60 days to receive. As no refunds will be available for cargoes discharged at Australian ports, shipowners will be forced to increase their freight rates to compensate for this new tax burden. Freight would not be subject to the tax, except for ships in the coastal trades.
• Again Under The Channel? ............ as a feasibility study for the opening of a 2nd fixed link between the UK & mainland Europe has been submitted to both the French & British governments by Eurotunnel, the operators of the existing Channel Tunnel. Eurotunnel says the study complies with the undertaking given in the concession signed in 1986, to present to the principals between now & the year 2000 a proposal for a drive-through link which shall be added to the 1st link ... and the increase of the traffic would justify it without undermining the expected return of the 1st link. In Nov. 1998 Maunsell Ltd. & Scentauroute were appointed to investigate the feasibility of building the new link, which according to Article 34.1 need only be a road link.
• Pay Up Or Pay BOTH Lawyers .......... as the Port of Houston Authority has asked the Federal Maritime Commission for a rule making that would make it clear that marine terminal operators have the right to collect attorneys fees & litigation costs from their customers when terminal operators are required to sue in court to collect fees for services rendered. This would be, in effect, to adopt the British system of litigation. Comments from the public are due at the FMC no later than Feb. 7. Filings can be mailed to the FMC, Washington, DC 20573-0001 or can be sent by e-mail. Secretary@fmc.gov
• L.A. Continues Record ......... as the Port of Los Angeles posted a 16.3% increase in container volume in Nov., compared with handling 347,816 TEU the year before. The Nov. 1999 total marked the port's 7th consecutive month of 300,000 or more box movements. More, the port moved 3,494,702 TEU between Jan. & Nov. of 1999, a 3.5% increase compared with the 3,378,219 TEU handled by the port for all of the record-setting 1998. The port's container volume in Nov. represents the facility's 3rd highest one-month total of the year, an uncommon result given the Nov.-Dec. decline in container traffic that usually follows the end of the traditional holiday season in Oct. Next door, the Port of Long Beach handled a record 4.41 million TEUs in 1999, up 7.6% over 1998. The Port of Montreal reported a record container throughput of 998,486 TEUs in 1999, 6.1% up on 1998.
• New World Handling Record .......... as PSA Corporation, jointly with NYK Line, has set a new world record for vessel productivity at its Tanjong Pagar Terminal. NYK's M/V Antares berthed at Tanjong Pagar Terminal at noon on Jan. 15, 2000, completed discharge & loading operations of 1,375 containers in just 6 hours, and departed that same evening. With this turnaroud time, PSA & NYK have scored a vessel rate of 234 containers (376 TEU), breaking the previous world record of 229 containers per hour, also currently held by PSA and achieved at Brani Terminal on July 5, 1995. That's fast!
• So Long Everglades ......... as Lykes Lines, APL, Crowley American & Evergreen are switching their joint U.S. East Coast/East Coast South America service from Port Everglades to the Port of Miami. The restaurants are better, by far.
• Cross Strait ........ as Taiwan has agreed to plans which will see passenger vessels traveling between Taiwan's main port Taichung & Meizhou in mainland China. The Mainland Affairs Council has agreed to requests for passenger services to be opened between the 2 ports on religious grounds, but only if chartered foreign tonnage is used and travels via a 3rd location such as Hong Kong. The service could start operating any time after Taiwan's elections in March. The MAC says it will only allow the opening of the route to the mainland if its usual "security concerns" are met 1st. Meizhou, in China's southeastern province of Fujian, is held to be the birthplace of the goddess Matsu by believers and there are a number of Taiwanese wishing to visit the city, most especially on her birthday in April. Direct passenger transport links between Taiwan & mainland China have been banned for many years.
• Zeebrugge Returns ........... as the Belgian port, saw transshipment figures rise up to 5.3 million tons in 1999; this was a hike of 8%. The port mainly oversees the transportation of trailers, although last year saw only a 2.5% increase in roll-on-roll-off activity. This figure is well below the average for the North Sea region for 1999. Still, Zeebrugge saw a 27% rise in the amount of traffic in general goods, so bringing the rise in transshipment for the year up to a respectable 8%. This amount of traffic handled is a record for Zeebrugge and it has been a while since it has been able to report such pleasing figures. 1988 was the start of a 5 year boom period during which time cargo handled rose by almost 75% from 20 million tons a year to 33.4 million tons per year. This period was followed by a slump which has only just risen back up to its former heights.
• Norasia Pulls Out ......... as the French shipping line is terminating its weekly Montreal/Northern Europe/Mediterranean container service. The Norasia Canada Express Service was inaugurated in the summer of 1998, employing two fast 1,400 TEU vessels. The carrier will pull out of the Atlantic trade when it ends the 7 ship weekly service in early Feb. The termination threw into disarray the plan of Hapag-Lloyd to introduce a direct service connecting Montreal to the Mediterranean. Having concluded a space charter agreement with Norasia, Hapag-Lloyd announced the launch of its service earlier this month, not knowing that Norasia would pull out of the trade. We suggest these carriers talk a little more often.
• "Gentlemen" Welcome Danish Vessel .......... as hundreds of angry Int.l Longshoremen's Assn. dockworkers clashed with police at Charleston's State Ports Authority Columbus Street Terminal early on 20 Jan. after Denmark's Nordana Line used 20 nonunion workers, guarded by about 600 police officers, to unload one of its cargo ship M/V Nordana Skodsborg. Police used dogs & at least one smoke grenade to break up the crowd. At least six people were treated & released from hospitals, and 8 people were arrested on trespassing charges. About midnight, approximately 600 workers arrived at the terminal and began hurling rocks & debris at police. Many of the protesters carried beer bottles, shouted obscenities & chanted "ILA, ILA." Police brought in dogs as the workers started tearing down the spotlights police had set up. News photographers & television cameramen were struck with debris & beaten by protesters. The ship left Charleston in the predawn hours.
• Your India Cargo Running Late, But Running ........ as Indian unions called off a crippling 5 day strike by over 100,000 dockers at 11 state-run ports on 22 Jan. after they reached a pay agreement with the government.
• Your Israel Cargo, Not Yet .......... as Israel's economy has lost more than US$24M as labor disruptions by port workers stretched into a 7th day as of 25 Jan. Workers protesting about government liberalization plans delayed unloading cargo at Israel's Mediterranean ports in Haifa & Ashdod, working at 40% capacity and keeping some 60 ships waiting, the port authority said in a statement. Four ships have been diverted to neighboring ports in Cyprus and Egypt. The government plans to issue a tender to private contractors to build and operate a new port in Ashdod, among other measures, and has failed to reach an agreement with workers. There have been extensive delays at the ports, despite an Israeli court issuing an injunction last week against a strike. Labor officials denied strike action was being taken, attributing the delays to precautions taken in the light of recent storms. Shlomo Tirosh, managing director of the Agrexco Agricultural Export Co, estimated it was costing US$700,000 a day as agricultural products rot waiting for shipment. "We are in the height of the export season in citrus and other fruits, vegetables & flowers," Tirosh told Israel Radio. "The damage is irreversible."
• Mexicans Get Short Stick End .......... as foreign cargo companies operating along Mexican shorelines with temporary permits are getting tax benefits over the domestic competition. Local firms have lost out on some US$14B over the past 5 years, according to Gerardo Sanchez, the president of the Mexican Chamber of the Maritime Transport Industry. Despite efforts made by unions & opposition parties to change the law nothing has been changed and foreign firms continue to be exempt from tax. The Mexican cargo industry is practically moribund, especially with the sell off of nearly all of Transportacion Maritima Mexican's (TMM) fleet. If all true, this situation is so in keeping with the tragic history of our dear neighbor Mexico.
• Cargo In Paradise ........... as South Seas Steamship Line & Polynesia Line, Ltd. will coordinate service between North America & the Pacific Islands will commence effective with Voyage 282 SB of the containership M/V Polynesia, departing San Francisco on Feb. 9, 2000. The lines filed a proposal for a space charter and sailing agreement with the FMC last fall to supply one vessel on a fortnightly rotation linking Los Angeles & San Francisco with Papeete, Apia & Pago Pago. The service will call the Matson Terminal at the Port of L.A. & Pier 80 at the Port of San Francisco.
• Blue Star Changes Name .......... as the Montevideo-based shipping line active in the liner trade between Northern Europe & the East Coast of South America, has changed its name to Hansa Star Line. The name change is related to the sale a few years ago of Blue Star Line to 2 different buyers. The Uruguayan shipping line Montemar took over Blue Star's Europe/South America trade, while U.K.-based P&O Nedlloyd acquired Blue Star's U.S./Australasia & Asia/Australasia routes.
• Not The Same Old Line ........ as a new Mauritian-owned line called La Ligne Ocean Indien, or Indian Ocean Line, has begun operating between Northern Europe & the Indian Ocean, serving mainly Madagascar. The line owns one vessel, the multipurpose "Yucatan," which will complete a round voyage every 10 to 12 weeks.
• Car Container? ......... as Maersk Sea-Land has announced plans to enter the lucrative car-carrying market by shipping vehicles in specially designed containers. The Danish shipping giant intends to pilot the scheme using 40 ft cube containers each holding four cars, and says that the flexibility & high sailing frequency offered by liner shipping could be a distinct advantage to car makers. The company also claims that vehicles loaded into boxes are less likely to suffer damage en route. No word on how this new system is different from how cars have been laiden in 40 footers for many years now.
• And Free Luggage If You Order Today .......... as the administrator of the Marshall Islands shipping register has taken considerable steps to attract new owners to the flag. Int'l Registries Inc.(IRI). He formerly ran the Liberian registry and decided that all ships registering in the islands by June 30 this year will do so free. The annual tonnage tax will also be cut from US$0.25 per gross ton to US$0.2 per net ton, slashing owners' annual tax by 50% on average. Owners of vessels already flagged in the Marshall Islands will have the reduction recorded as credit against next year's tax bill. The open register currently has around 270 ships of about 7.5 million gt. IRI denied that the move was an attempt to take tonnage away from Liberia, whose flag the company ran until the end of last year. Operators are standing by.
• CMA-CGM & K Line Swap ......... as the French carrier has finalized a slot exchange agreement with Japan's K Line for the Northern Europe/Far East trade. The arrangement has been in operation since January 1 & allows CMA-CGM to offer their North European clients the ability to load cargo on vessels that call at Japanese ports directly. All services on CMA-CGM's Europe/Asia trade miss Japan on the eastbound leg. However, K Line, because of its alliance with Yang Ming Line & COSCO, does offer such a call. In return the K Line associates will get equitable slots on CMA-CGM vessels to other Asian destinations.
• M/V Romana I Under Arrest .......... as Haiti has seized a cargo ship & arrested its captain and chief engineer in a dispute over cargo bound for Trinidad and Tobago, the ship's charterer said on 3 Jan. Pyramid Shipping Consultants in Trinidad, said the company had asked Haiti to act after the M/V Romana I, carrying US$300,000 worth of construction equipment, ignored instructions to deliver the equipment in Tobago and sailed with it to Haiti -- which was not a scheduled call. The ship's owners, Florida-based Caribbean Ship Management, allege that Pyramid Shipping owes them money. The company could not be reached for comment at its Miami offices. Pyramid denied it owed the owners money or that anyone would want to visit Haiti on purpose.
• M/V Legionario Under Seige ........... as Greenpeace activists climbed 2 cranes in the port of Aarhus in western Denmark on 23 Jan. to block the unloading of a shipment of what it said was genetically modified animal feed. The protest came as delegates from 134 nations were gathering in Montreal for negotiations on a United Nations-sponsored agreement aimed at protecting biological diversity. The ship arrived from Argentina with a 45,000 ton cargo, a mixture of naturally grown & genetically modified soy beans. In related news, the 2 largest natural-food store chains in the U.S.- Whole Foods Market & Wild Oats Markets Inc., announced they would ban the use of genetically modified organisms in their private-label brands.
• Columbia Coastal Transport ............ as its new 912 TEU capacity super-barge get underway. As one of the largest of its kind, the barge will be deployed on a U.S. East Coast-U.S. West Coast route via the Panama Canal bringing the U.S.-flag container feeder barge operator's total capacity up to 6302 TEU. The Columbia Elizabeth is capable of transporting full containers, empties and special large cargo on its 5,900 mile route round the coast of the U.S. The company sees this all-water form of transport as helping reduce congestion on roads & therefore pollution. Dimensions are 343 x 94 x 21 feet.
• Gunmen Request Badges, Perhaps To Arrest Themselves ........... as former members of the Moro National Liberation Front in the Philippines seized the port of Pollok last week demanding jobs as security guards at the facility. The gunmen, numbering around 100, took control of the administration building in the port, which is in southern Mindanao, & evicted its staff. Although no hostages were taken & no threats made, operations at the port were badly affected by the incident until negotiators persuaded the men to end their occupation. The MNLF signed a peace deal with the Philippines government in 1996, with many members of the group joining the army & police. The reformed members of this group are to be congratulated.
• Mayday! Drunk "Capt." Caught In The Tub.......... as a Danish man set off a real-life sea rescue mission on Jan. 7, while playing with toy ships in his bathtub. The drunk 52-year-old called in repeated mayday alarms to the Maritime Sea Rescue Command as he piloted his water toys, claiming he was captain of a 12-crew freighter in distress. Giving a position west of the Baltic Sea island of Bornholm, which belongs to Denmark, he said his vessel was listing 45 degrees & that one crew member had been washed overboard. The authorities leaped to respond, sending 2 rescue vessels to search the area for 1.5 hours. But police eventually traced the phone calls to the home of the intoxicated man, who admitted the false alarm. He faces fines & compensation claims of 10,000 crowns (US$1,400) for the "disaster," which police told the daily Sjaellands Tidende newspaper was the 1st of its kind on record. The remaining 11 crew aboard the bath toy are presumed safe. We mourn the one washed overboard & down the drain.
• This Month In U.S. Naval History .......... as on January 17, 1955, USS Nautilus (SSN 571), the 1st nuclear-powered submarine, is commissioned & sends message "underway on nuclear power." On August 3, 1958, Nautilus would be the 1st ship to reach the North Pole in world history.

5. The Cargo Letter Cargo Damage Dispatches

• Back By Popular Demand

Visit our new Vessel Casualties & Pirate Activity Database. This is only a partial list of of casualties for the month in that most dangerous place ....... out there.

The Maltese bulk carrier M/V SEMENA (13,457 gross), in ballast, grounded off Tuapse, while waiting to load, in lat 44 20.1N, long 38 31.4E, Jan 22. Still aground Jan 25. No apparent damage. (Wed. Jan. 26 2000)

The Panamanian research vessel M/V TEKNIK PUTRA (1,009 gross) grounded on Thursday Island, in lat 10 34.28S, long 142 14.9E, Jan 24. Refloated with tug assistance same day. Anchored at Cape York. No apparent damage. (Tues. Jan. 25 2000)

The Liberian bulk carrier M/V DECURION (34,839 gross), from Argentina with rice, was in collision with the Panamanian container vessel M/V MSC GIOVANNA ( 27,103 gross) off Cape Town Jan 21. Decurion holed & down by stern, however, proceeded to Cape Town under own power. MSC Giovanna sustained minor damage & proceeded for Durban. (Mon. Jan. 24 2000)

The Taiwan M/V YU TAI NO. 6 (2,981 gross) sank in lat 24 57N, long 120 30E, Jan 20. 1 crew member rescued safely. 1 sighted in water. Search continuing. (Sat. Jan. 22 2000)

The Brazilian tanker M/T LONDRINA (27,063 gross), with cargo fuel oil, reported drifting 80 miles northwest of Barbados Jan 19. Taken in tow by tug S mit Curacao bound Barbados, where ETA Jan 20. (Fri. Jan. 21 2000)

A crankcase explosion on 20 Jan. in the main engine of 6,600-TEU M/V Sovereign Maersk resulted in the complete loss of propulsive power and the abandonment of a voyage from Hong Kong to Long Beach. The vessel, which is in the largest class of containerships afloat, was taken in tow and is expected to reach Kobe on 26 Jan., where it will discharge all its cargo. The Sovereign Maersk is the first of Maersk Sea-Land's 9 ultra-large "S-class" containerships. It was named by M/V Queen of Denmark in 1997 has been featured frequently in the line's publicity. The explosion injured the ship's 1st engineer, though not seriously. The engine room had to be flooded with CO-2 gas to extinguish the fire. Cause of the explosion wasn't immediately known. The Sovereign Maersk's engine was of a type installed in other containerships, including Maersk's 6, slightly smaller, K-type containerships, said Jesper Kjaedegaard, Sr. V.P. of A.P. Moller. Kjaedegaard also pointed to the advantage of his organization's size in responding to a problem like this. It was fortunate that a powerful A.P. Moller tug was on hand to take the Sovereign Maersk in tow, avoiding the need to discuss salvage, and that the 3,600-TEU M/V Sea-Land Initiative could be diverted to Kobe to load the Sovereign Maersk's boxes for Long Beach. (Thurs. Jan. 20 2000)

The Greek M/V TORM BROOKLYN (13,688 gross) was reported disabled 800 miles southeast of Bermuda Jan 15. Tug proceeding. ETA Jan 19. (Thurs. Jan. 20 2000)

The Norwegian M/V ALUTRANS (1,555 gross), Ghent for Rausand with aluminum slag, grounded at Gurskoya Jan 16. Subsequently arrived Molde Jan 17 with a severe list and taking water. (Wed. Jan. 19 2000)

The Indian tanker M/T RICHA (6,681 gross), with lubricating oil, was disabled by an engine-room fire in abt lat 19 47N, long 87 30E, Jan 15. In lat 19 40N, long 87 28.7E, Jan 17 and requires towage. (Tues. Jan. 18 2000)

Antugua & Barbuda vessel M/V MEMEL, (2,997 tons gross, built 1999) had fire in engine-room in lat 44 46.7N long 08 56W Jan 15. Main engine inoperable. Being towed to Corunna by salvage tug Ibaizabal Uno. (Mon. Jan. 17 2000)

The Faroe Islands refrigerated M/V HALGAFELLI (1,957 gt) grounded north of Anda Light in the Vesteraalen Islands. Crew rescued & brought to Sortland. Vessel refloated herself early today, drifted against Andoya Island with large list & sank. (Thurs. Jan. 13 2000)

Syrian M/V LADY HADIL (481 gt) grounded on Irwas Island, near Tartous 1230, Dec 27, due heavy storms. No refloating attempts made to date. (Wed. Jan. 12 2000)

Honduran M/V MATTHEOS (2,417 gt), loaded with 2,500 tons of iron, sank today after taking on water while docked at Kalamata port. Crew safely rescued. (Tues. Jan. 11 2000)

Singapore bulker M/V J. MARION SKY (23,277 gt, built 1991) was in collision with the 1999-built Antigua & Barbuda M/V INDUSTRIAL CENTURY (4,246 gt, built 1999) in lat 20 08N, long 83 32W, in clear weather on Jan 7. The handymax vessel, carrying a cargo of alumina hydrate and sand, sank nine minutes after the collision and 19 of the ship's 21 Philippine crew were rescued. The master of the ship & another crewmember have not been found, and the search for them has been abandoned. The survivors were picked up by the badly damaged Industrial Century's sister ship M/V Industrial Beacon, which was in the area at the time of the incident. The Century is heading for Curacao for repairs. The cause of the collision is unknown. (Mon. Jan. 10 2000)

The Bahamas passenger vessel M/V ISLAND BREEZE (31,793 gross), Casablanca for Tenerife with passengers, had boiler problems after sailing Funchal on Jan 5 & put back to Funchal Jan 6. Some passengers returning to UK, some remain on board. (Sat. Jan. 8 2000)

The Norwegian ferry M/V BARONEN (172 gross), Bergen for Olen with passengers, struck an unidentified object near the Ruanane Light, off Flesland, Jan 5. Moored Flesland same day. Sustained damage to bow section & taking water. Reported in danger of sinking. (Fri. Jan. 7 2000)

The Russian M/V DVINA (2,426 gross), Brightlingsea for River Humber with timber, grounded while outbound from Brightlingsea Jan 1. Refloated Jan 5 and proceeded. No pollution. May have sustained rudder damage. (Thurs. Jan. 6 2000)

The Panama M/V WOO YANG GLORY (2,415 gross), Kwangyang for Nagoya with steel, grounded off Mutsure Island Jan 3. Refloated with tug assistance Jan 4 and towed to Wakamatsu for inspection. Expected to have sustained bottom damage. (Wed. Jan. 5 2000)

The Cyprus bulk carrier M/V AIS MAMAS (10,273 gross), West Africa for India with logs, had water ingress into Hold No.1 off Cape Columbine Jan 1. All crew abandoned vessel & safely rescued. Tug Red Toucan proceeding, ETA Jan 3. Will tow to Saldanha Bay. (Tues. Jan. 4 2000)

The Ukrainian cargo ship M/V Tiksi (2,300 gross), flying a Cambodian flag, sank early 2 Jan. in the Black Sea and 1 crew member drowned, the Russian Emergency Situations Ministry reported. The other 11 crew members were rescued from life boats about 8 miles from the Russian shore near the resort of Dzhugba, a duty officer in Moscow said. They were taken to shore on a tugboat. The vessel was sailing between Nikolayev, Ukraine & Poti, Georgia when it went down. The ministry said that the cause of the sinking was unknown, but it may have been stormy weather. No other details were available. (Sun. Jan. 2, 2000)

Seventeen people, including 2 young children, were rescued after abandoning the Syrian-flagged cargo vessel M/V Seven Seas in distress off Cyprus on 31 Dec. The survivors, described as 12 Syrians & 5 Romanians, were winched to safety by British royal air force and Cypriot police helicopters some 33 miles southeast of the East Mediterranean island. Most were crew of the vessel, which was laden with a cargo of steel on its way from Ukraine to Djibouti on the Horn of Africa. When rescue teams arrived about an hour after the first distress signal was issued the survivors were found on two rafts. A helicopter search failed to locate the ship. Police said they were still investigating what triggered the distress call. "We assume it is on the sea bed by now," a rescue official told Reuters. The survivors included 2 young children. Whole families living in ships is not uncommon and many merchant ships now have such facilities. The distress signal was 1st picked up via satellite by British forces stationed in Cyprus. (Fri. Dec. 31 1999)

Spanish ro-ro vessel M/V ARROYOFRIO DOS ( 8,126 gross tons, built 1985) experienced steering problems off Ushant on Dec 27. Will proceed to Brest with tug assistance. (Thurs. Dec. 30 1999)

The Russian-flagged tanker M/T Volganeft 248 broke in two & its bows sank on 29 Dec. near the mouth of the Bosphorus, among the world's busiest shipping routes, spilling oil onto Istanbul's residential coastline. Turkish coast guards rescued 12 of the 17 man crew of the vessel which ran aground in strong winds overnight, after securing the stern of the vessel with cables to the shore. Five other crew members who initially chose to stay on board were taken ashore later. The ship, carrying 4,300 tons of heavy fuel oil, had passed through the Bosphorus strait when it went down. There was no disruption to traffic. Russia's Ministry for Emergencies said the vessel was of a type that normally plies the Volga-Don canal to pick up loads from the Volga's refineries. Thick layers of sludge washed into a nearby residential district, coating roads & sidewalk cafes. Bulldozers scraped up the spillage while shopkeepers donned rubber boots and grabbed shovels to pitch in. A strong wing halted work to prevent more oil from spilling into the sea. Istanbul municipality decided to impose a US$36,380 fine on the tanker's owner for pollution. (Wed. Dec. 29 1999)

M/T Erika Follow Up ......... as finger-pointing in the Erika sinking has continued, with an angry rebuff coming from the Maltese authorities following criticism of their shipping register, which had the tanker on its books. Responding to comments made by the French ambassador to Malta, Lino Vassallo from the country's maritime authority said: "It would be better if statements from people who are not technically authoritative on the subject were not made because they give the wrong impression and a distorted picture. I understand the reaction of the French people when faced with the disaster on their coast, and the tendency is for people to start pointing fingers. But when it comes down to reality, we did everything we had to do." The comments came as France switched the focus of its blame to Italian classification society Rina for failing to handle the ship properly and the EU stepped up its pressure on the Maltese and Cypriot flags to improve their standards before they joined the European Union.

Doubts were apparently raised over the thickness, and thus the strength, of longitudinal structures around the number 2 ballast tanks by a Rina surveyor. Although he was unable to make thickness measurements, he recommended that a further check be made in January this year, by which time the tanker had sunk. The classification society has begun its own examination of the cause of the sinking and said: "It is proper to expand the range of the inquiry in this important matter as it is unacceptable to express hasty and unfounded opinions about responsibilities at this stage. The investigation is underway and there is no evidence that the sinking of the ship may be linked to errors or omissions by Rina." In the meantime, the lawyer acting for the ship's master has said that Capt. Mathur had spotted rusting in one of the tanker's ballast tanks in Nov. and had reported this to its owner, Tevere Shipping, as well as to Rina. The classification society denies receiving any such report.

More on The Loss of M/T Erika ........ from our friend Barry Parker. Great photos.
http://www.conconnect.com/erika.htm
See Also
http://user.online.be/inspilot/sconbulk.htm
http://user.online.be/inspilot/satwdb2.htm

Incident Report For M/V Lassia ........ salvage efforts info, pictures & commentary regarding the bulk carrier "Lassia" sagging incident last month. http://www.conconnect.com/lassia.htm

NOTE: The historic dangers of carriage by sea continue to be quite real. Shi ppers 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

6. The Cargo Letter "Cyber Ports Of Call"

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

IATA Y2K Rollover Website ........ new material sine the "magic day."

THE Certified #1 Most Complete Shopping Site ....... includes transport industry shopping. No kidding.

U.S. FDA Food Safety

Int'l Center For Trade & Sustainable Development Calendar

Commentary On INCOTERMS 2000 ........ from our great friend Peter Jones, the chief legal counsel for FIATA.

Int'l Chamber of Commerce Bookstore ............. get the new Incoterms, effective 1 Jan. 2000.

World Trade Organization Meeting Schedule ........ if you'd had this in Seattle last month, you would have known to leave town!

Win The "Name The Irish Ferry Contest" ........ free trips for life! Hurry, ends this month.

Green Shipping Hamburg Conference ............ Int'l Conference on Incentives for Environmentally Sound Maritime Transport , 16 - 17 Feb.

Int'l Ship Suppliers Assn.

Logistics.com ........... Dr. Jossi Sheffi, director of the Center for Transportation Studies at the Massachusetts Institute of Technology has begun a new e-commerce company

Argosoft Software .......... new program allows shipping companies to track jobs from an initial job estimate to the actual billing of the client with speed & simplicity. Argosoft is claimed as a great improvement over existing software programs for this task.

Emons Transportation ........ the new website.

ABF Freight System ........ as several new E-Commerce tools, including Shipment Planner, which offers shipment management and tracking via a simple calendar interface, & Dynamic Rerouting, which allows in-transit shipments to be rerouted via ABF's Internet site.

American Freightways .......new features are color-coded service maps & through-rates between U.S. & Canadian points.

eFruit International ...........hosts an online vertical marketplace where buyers & sellers of fruit juice and fresh fruit meet to do business.

The America's Cup ........ special coverage of the world's most prestigious yacht race, from The Weather Channel.

MGN Shipbuilding Online Conference

Railroad Stocks Special Report ............ from the Wall Street Journal.

"Untreated Water & The Traveling Sailor" ........ new article.

"Traveling Off The Beaten Path? Get a Hepatitis Vaccine" ......... new article.

Teamsters On Strike At Overnite Transportation ......... their side told. See our full story of this conflict in Part 1, above

National Shipbuilding Research & Documentation Center ...... has just released two page turners. If you're in the business, you'll be interested.
1.] NSRP Ship Structure Application Protocol. Report #0429
2.] NSRP Piping Application Protocol. Report #0424

George Bush Intercontinental Airport ...... Houston

Tall Ship Friends

Aberdeen Boat Club

Topica ...... where you go to sign up for Internet discussions groups. An increddible range.

Doing Business Online Seminar ........... March 23 & 24, 2000, at the Ramada Plaza Hotel Int'l in San Francisco. A nationally recognized faculty of legal & business professionals will provide invaluable information for all lawyers & corporate managers involved in developing businesses on the web.

Thousands of Free Photos & Screen Savers .......... for our readers.

The Hamster Dance ........ annoy everyone in your entire office with a single website, if you have sound. Cut to the chase!

OUR "E" Section: The Forwarder/Broker World

7. Port Truckers Ruled Independent

• All U.S. Ports Look On

LAX - 19 Jan. 2000 -- A blue-ribbon panel of specially appointed retired judges has ruled that over 1,000 truck drivers who operate out of the Los Angeles & Long Beach harbors are correctly classified as independent contractors.

In this most recent challenge to the manner in which hundreds of harbor-based trucking companies throughout the U.S. do business, this panel rejected the claim that the truck drivers were employees, and in doing so, set back the continuing efforts of various unions to organize harbor truckers, independent truck owners & drivers who haul containers out of the Los Angeles & Long Beach harbors.

This action was filed as a class action on behalf of all truckers who contracted with Interstate Consolidation Services & Intermodal Container Services since July 1992.

The case of IRWIN ALBILLO & LUIS MONTOYA Vs. INTERMODAL CONTAINER SERVICE, INC., (L.A. Superior Court Case No. BC 174508) was tried as a class action in Aug. & Sept. 1999 before Retired U.S. District Court Judge Eugene Lynch, Retired Calif. Court of Appeal Chief Justice Arleigh M. Woods & Retired L.A. Superior Court Judge Keith Wisot.

These judges, in a unique procedure authorized by the Calif. Constitution, were specially appointed by the L.A. Superior Court & the Workers' Compensation Appeals Board to try the action.

The key issues put before the Court: (1) whether the class members were correctly classified as independent contractors or whether they were actually employees; (2) whether the class members were converted to employees because they agreed by contract to purchase worker's compensation insurance as a prerequisite for contracting with Intermodal; (3) whether Intermodal's requirement that the class members purchase certain insurance through them or on their own violated federal transportation regulations (49 C.F.R. 376.12), Calif. insurance law or the Unfair Business Practices Act; and (4) whether the retention of insurance monies collected over & above the cost of insurance as an administrative fee constituted an unfair business practice or fraud.

The three judge panel unanimously found in favor of Intermodal on each issue. "The nation's entire transportation industry has been following this case and waiting for this decision," explained Intermodal's lead attorney Robert Millman. "Every major port, from Seattle to New York, will be impacted by it."

The courts have shown a willingness to confer employee status on workers not classified as employees by the companies they work with (as in Microsoft v. Vizcaino). However, the Intermodal decision affirms that the manner in which harbor trucking companies conduct business using independent truckers is both legal & fair, and in conformity with federal & state law.

It also represents the latest in a string of setbacks to unions who have attempted to organize the harbor drivers. "It represents a win for the trucking industry and the truck drivers, who have the ability to, and in fact do, earn more for themselves and their families working as independent busines smen than they would as employees," added Keith Jacoby, lead trial lawyer in the action.

Originally filed in July 1997, this case was one of 33 class actions filed by the plaintiff's attorney against other intermodal trucking companies. It was the 1st of those cases to be tried, but certainly not the 1st such look at the port trucker issue by California courts.

A similar, non-class action Los Angeles Superior Court lawsuit attempting to outlaw the independent contractor status of port truckers was defeated prior to the significant expense of a trial in 1996 by the LAX logistics law firm of Countryman & McDaniel, publishers of The Cargo Letter.

8. Pirate Attacks Up 40% For 1999

• Reuters Continues The Watch

KUALA LUMPUR, Jan 24 (Reuters) Pirate attacks worldwide surged 40% in 1999 as economic and political troubles in Indonesia spurred a dramatic increase in incidents in Southeast Asia.

The Int'l Maritime Bureau (IMB) said in its annual report on 24 Jan. that the number of actual & attempted pirate raids increased to 285 last year from 202 in 1998.

But the number of seafarers killed fell to 3 last year from 78 in 1998. "This could be due to greater efforts by governments to combat piracy," the report said, citing the recent sentencing to death of 13 pirates in China.

Indonesia accounted for 113 of the attacks, almost double its 1998 total of 60 and the lion's share of worldwide raids.

"We believe it was due to the economic situation & political instability," Noel Choong, regional manager of the IMB's Piracy Reporting Center in Malaysia's capital Kuala Lumpur, told Reuters.

He was referring to upheavals in Indonesia after the resignation of former President Suharto in 1998.

PATROLS CAN HELP

There was also a dramatic increase in the number of attacks in the Singapore Strait, which separates Singapore island from Indonesia's Riau Archipelago & links the Strait of Malacca with the South China Sea. There were 13 compared with just 1 in 1998.

But Choong said the frequency of attacks in that area dropped sharply after the Singapore Coast Guard and the Indonesian Marine Police stepped up patrols, and no incidents were reported in the final three months of 1999.

"It is a very clear indication that with cooperation, authorities can reduce piracy or eradicate it altogether," Choong said.

The IMB has asked Indonesia to mount more patrols in its waters. "There may be a decline in attacks if the Indonesian authorities are serious about eradicating piracy in their region," Choong said.

Seven countries or regions accounted for more than 2/3 of the attacks -- Indonesia (113), Bangladesh (23), Malaysia (18), India (14), Singapore Strait (13), Somalia (11) & Nigeria (11).

Attacks dropped from 15 to 6 in the Philippines & from 10 to 2 in Ecuador.

Most of the attacks -- 217 of 285 - involved pirates boarding ships. There was a decrease in the number of hijackings to 8 from 17.

There were also fewer assaults on crews, but many more incidents of crews taken hostage. Knives rather than guns were the most common weapon.

INDIA, CHINA STEP UP EFFORTS

The IMB cited government efforts to combat piracy as a possible explanation for the dramatic decline in the number of crew killed last year.

"In the last year, both India & China have arrested alleged ship hijackers and China recently sentenced to death 13 of the hijackers of M/V Cheung Son, one of the country's most brutal recent cases of piracy involving the murder of 23 Chinese seamen," it said.

Last month, a court in China's southern province of Guangdong sentenced the 13 men, all Chinese except for one Indonesian, to death for clubbing the seamen to death & throwing their bodies overboard tied to weights.

The pirates had posed as Chinese paramilitary police and hijacked the 10,373 GRT bulk carrier M/V Cheung Son in Nov. 1998.

Visit our new Vessel Casualties & Pirate Activity Database.

Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News Lloyds & other world sources. [an error occurred while processing this directive]