The Cargo Letter

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THE CARGO LETTER [350]
Air & Ocean Freight Forwarder - Customs Broker News
29 March 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". W e have very sad vessel casualty & pirate news this month, including "OUR TOP STORY" of M/V OOCL America. Also this month, we begin the incredible Beachcom ber Alerts! of Dr. Curt Ebbesmeyer, in Part 2.

To help you find what you need -- FAST -- try our transport reference search engine installed at our www.CargoLaw.com website!

The thousands of Forwarders & Brokers who read this publication around the world need to learn of YOUR experiences and what YOU learned today. 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.

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

INDEX to The Cargo Letter:

OUR Top Story
   1. M/V OOCL America Hit Hard 
      * Exclusive Photos Now Tell The Story
OUR "A" Section: Trade, Financial & Inland News
   2.  Freight Forwarder Trade Briefs
   3. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
   4. Freight Forwarder World Air Briefs
OUR "C" Section:  FF World Ocean News
   5. FF World Ocean Briefs
   6. The Cargo Letter Cargo Damage Dispatches
      * Back By Popular Demand
OUR "D" Section: FF in Cyberspace
   7. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
   8. New U.S. Transport Related Legal Cases
   9. Beachcomber Alert! 
      * Watching Flotsam From Our Errors
      * What Becomes of Our Lost Cargo
  10. Modern Pirates Still Plunder U.S. Ports

OUR Top Story


1. M/V OOCL America Hit Hard

--by Michael S. McDaniel for The Cargo Letter

LAX - 29 Mar. -- As first reported in The Cargo Letter [349], the Hong Kong container vessel M/V OOCL AMERICA (66.047 gt, built 1995) sustained heavy weather damage on a voyage ex Long Beach for Kaohsiung on Jan. 29. This we knew at the time.

Major cargo damage was suspected, but nothing like that seen in the new information & exclusive photos we obtained late last month. Now we know what really happened. The amazing photos were immediately posted at our special web page for this disaster. You will not find these photos and data anywhere else.

The vessel encountered severe weather on Jan. 31 in the Pacific Ocean & lost a large number of containers overboard. OOCL put the figure at around 300, but could not confirm exactly, as the vessel was still underway at the time of report. A maritime attorney for cargo interests who had been contacted about the incident at the time put the figure at 350 containers lost overboard & 217 still on board, but crushed or bent out of usable condition.

Others vessels that lost cargo in the storm were K Line's M/V Astoria Bridge & two CSX Lines' ships slot chartered to Maersk Sea-Land ..... M/V Sea-Land Hawaii ...... washed 21 x 40 ft boxes in to the sea ....... & ...... M/V Sea-Land Pacific ...... lost 20 containers overboard. Current estimates for losses on the 3 vessels are at least 608 ocean containers either lost or destroyed from flooding or collapsed bays.

Losses are understood to be:

M/V OOCL America (pictured at site) 
    Lost Containers: 350
    Crushed Containers: 217 - flooding and collapsed bays.
M/V Sea-Land Hawaii
    Lost Containers: 21
    Crushed Containers: UNKNOWN
M/V Sea-Land Pacific
    Lost Containers: 20
    Crushed Containers: UNKNOWN

By comparison, the 1998 historic result of Typhoon Babs for M/V APL China was a loss of about 406 Containers, not the 608 or more which may be involved here. Yet for the 1998 loss with 200 fewer containers lost or destroyed, an APL source told The Cargo Letter on 3 Dec. 1998, the following: "This loss may run in excess of US$100M. This will be the biggest cargo loss since the dawn of containerization"

The major question will be exactly how much freight was involved this time, versus many of the containers which must have been on back haul.

To compare these current circumstances, please take a moment to visit what was to it's time, the historic damage sustained by M/V APL China in Nov. 1998 .....>>> http://www.cargolaw.com/1998nightmare.html

The incredible picture you will see of M/V APL China 1998 is now among the most famous in maritime history and was 1st published to the world by The Cargo Letter.

Indeed, by keeping the identity of our contributors 100% confidential, you are able to view our continuing series of "Cargo Disasters." As of our posting date, no photos of M/V OOCL America had been released to any other news organization. We are quite proud and will continue to work for YOU, the industry. Please continue to send your material in confidence to us. McD


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


2. Freight Forwarder Trade Briefs

3. The Cargo Letter Financial Page


OUR "B" Section: FF World Air News


4. Freight Forwarder World Air Briefs


OUR "C" Section: FF World Ocean News


5. FF World Ocean Briefs

6. The Cargo Letter Cargo Damage Dispatches

Below are the "extremely edited" March casualty reports just as we posted them to our web site, just as you would have seen them, day by day when visiting. Space does not allow us to provide you with either the full stories, or even all the stories. Get the full details on line.

At our site you can request to be notified whenever there is an incident at sea, or some major transport event. Be up to date!

Visit our Vessel Casualties & Pirate Activity Database.

Even after editing, the following is only a partial list of casualties for the month in that most dangerous place ....... out there. Visit the website!

The Liberian-registered M/V Martina collided with German-owned 1,297-ton container ship M/V Werder Bremen off southwest Sweden and 5 Polish nationals are missing after one of the vessels sank. Those missing are 4 crew of Werder Bremen & a 5th person aboard the Martina, which was taking a cargo of hydrochloric acid from Sarpsborg in Norway to Copenhagen. 2 crew members of the 387-ton Martina were rescued & are in hospital. The Martina, owned by Euro Shipping Ltd, sank after the collision which occurred in poor visibility off the Hoganas peninsula in southwest Sweden near Denmark around 0800 GMT. Thirteen crew were rescued unharmed from the Werder Bremen. About 20 vessels & 5 helicopters from Denmark & Sweden are searching for survivors, and ambulances are waiting at Hoganas. Divers will examine the sunken vessel in case the missing people have survived in air pockets. (Tues. March 28 2000)

The New Zealand research vessel M/V MONOWAI (2,753 gross) had engine-room fire while berthed at Lowestoft, awaiting refit, Mar 26. Fire extinguished same day. (Tues. March 28 2000)

The Romanian M/V OCEAN LINE 2 (5,983 gross), while anchored at Jetty 13, Chittagong, was struck by the Turkish bulk carrier M/V LIMA 1 (16,023 gross) on Mar 24. Both vessels sustained damages. (Mon. March 27 2000)

Rescue Mission: After hours of fruitless searching, Canadian ships called off the hunt for more survivors of M/V Leader L which sank in the high seas off Bermuda. 12 still missing in the Atlantic were presumed dead. 13 sailors from the 31-member crew of the Leader L were rescued in a dramatic operation, with Canadian & U.S. aircraft dropping life rafts to survivors bobbing in the sea. Six bodies were recovered from the ship, which sank hours after placing a distress call March 23, 400 miles northeast of Bermuda. By evening March 24, several hours had passed without finding more bodies or survivors, and Canadian aircraft & navy ships called off the search. The Canadian navy destroyer Iroquois was taking the survivors & the dead to Bermuda and was expected to arrive this afternoon. Radio transmissions from the Leader L continued until just seconds before it went under Thursday night, suggesting some crew may never have escaped the vessel. The ship sank after the Leader L placed a distress call saying that a 45-foot steel hull plate had come loose & water was flooding into the hold. See the entire exciting story at our Vesse l Casualties & Pirate Activity Database on the web. (Sat. March 25 2000)

The UK passenger/ro-ro vessel M/V NORTHERN MERCHANT (24,046 gross), Dunkirk for Dover loaded, landed heavily while berthing at Dover Mar 22. No injuries. Returned to Dunkirk for discharge. Sustained superficial damage only. Survey under way. (Fri. March 24 2000)

The St. Vincent & Grenadines bulk carrier M/V Bovec, 20,433 gt (built 1976) dragged anchor in high winds & grounded in Tuck Inlet, northern Prince Rupert Harbor, Mar 21. Vessel still aground Mar 22. Salvage operations under way. (Thurs. March 23 2000)

The St. Vincent & Grenadines M/V ANA MERCEDES (1,002 gross), Puerto Cortes for Corpus Christi w/ cement, reported taking water in lat 14 15N, long 68 46W, Mar 19. Tug Smit Curacao evacuated 6 crew & escorted vessel to Curacao, where arrived Mar 20. (Wed. March 22 2000) The Bahamas ro-ro M/V DART 2 (9,080 gross) grounded near Flushing outer harbor Mar 20. Tugs proceeded. Refloated same day. (Tues. March 21 2000)

The Nova Scotia fishing vessel F/V Fame rescued 26 fishermen from the large fishing vessel F/V BCM Atlantic that sank off the coast of Labrador early on March 19. The crew of the Nova Scotia-registered BCM Atlantic took to the water in 2 life rafts & 1 lifeboat after the ship began taking on water through a hole, caused by unreported means. F/V Fame reached the scene about an hour later & picked up the crew. The incident took place about 149 miles east of Labrador. (Mon. March 20 2000)

U.S. bulk carrier M/V JUDY LITRICO, (15,544 tons gross, built 1973) reported with fire in engine room Mar 19 in lat 33 44N, long 34 22W. Crew attempting to extinguish fire. Salvage firefighting tug proceeding to casualty. (Mon. March 20 2000)

The Portuguese F/V JOAO NUNO was in collision with the Swiss chemical tanker M /T CERVIN (4,076 gross) near Cape Saint Vincent, Portugal Mar 15. Joao Nuno sank. All her crew safely rescued by Cervin. (Sat. March 18 2000)

The Liberian tanker M/T J. DENNIS BONNEY (88,946 gross) was in collision with the Singapore tanker M/T EAGLE CARINA (52,504 gross) near the LOOP Terminal on Mar 15. J. Dennis Bonney sustained a crack & spilt about 200 barrels of crude. Both vessels are still anchored in the area under investigation. (Fri. March 17 2000)

Another one nabbed, as the Belize tanker M/T SEA LEADER B. (4,644 gross) was detained by the U.S. Navy in UAE waters Mar 14 for allegedly breaking the UN Embargo by smuggling Iraqi cargo. Handed over to the Abu Dhabi Coast Guard. In other news today, America's flag came down & the Polish flag was hoisted aboard USS Clark as the ship embarked on a 2nd career in the Polish navy. The 20 year old 445 ft. missile frigate Clark became only the 2nd U.S. ship given to Poland. The country received a U.S. submarine during World War II (Thurs. March 16 2000)

The Japanese stern-trawler M/V CHIYO MARU No.5 (3,086 gross) had engine room fire & immobilized in lat 50 53S, long 58 23W, Mar 12. Tug Typhoon proceeding & will tow her to Stanley for repairs. (Wed. March 15 2000)

The South Korean M/V CHUNG DO (1,050 gross), Kawasaki for Inchon with scrap, grounded in the Naruto Channel, Mar 9. Sustained leakage to forepeak tank. Refloated. Subsequently arrived Komatsushima Mar 10. (Tues. March 14 2000)

Dutch passenger vessel M/V NORSTAR (26,919 gt, built 1974), with 822 people on board, had fire in engine-room in lat 52 55N, long 01 37E, at 0019, UTC, Mar 11. Vessel shutdown one engine & proceeded for Zeebrugge with assistance of ferry M/V Norsky & lifeboats standing by. No injuries reported. Vessel arrived safely at Zeebrugge same day. (Mon. March 13 2000)

17 Burmese & South Korean seamen turned up unharmed in Thailand today after being held by pirates for more than 2 weeks. About 10 pirates armed with rifles raided the freighter M/V Global Mars on Feb. 23 in waters off northern Sumatra, in the Malaccan Straits, Indonesia. They released the crewmen - 7 South Koreans & 10 Burmese - on March 7, allowing them to take a small boat. But the crewmen took off in the Panama-registered ship with its 6,000-ton cargo of palm oil. After sailing for 3 days, the crewmen arrived at Thailand's Phuket Island & sought help from local police. They were in good health. The vessel was on its way from Malaysia to India when the pirates attacked. The vessel continues missing & the subject of a US$100,000 reward. See the entire exciting story and vessel descriptions at our Vessel Casualties & Pirate Activity Database on the web. (Sat. March 11 2000)

The Cyprus bulk carrier M/V KASTOR TOO (10,932 gross), Aqaba for India, sank i n lat 13 93N, long 53 28.5E, Mar 10. All 18 crew rescued safely by the container vessel M/V Mildburg. (Sat. March 11 2000)

The Antigua & Barbuda M/V FALDERNTOR (3,572 gross), for Mobile in ballast, had steering problems & grounded in the Mobile Ship Channel Mar 8. Refloated with tug assistance same day. No apparent damage. Arrived Mobile Mar 9. (Fri. March 10 2000)

The Bahamas tanker M/T CLEMENT (32,689 gross), from Corunna with crude oil, grounded on Falster Island, in lat 54 28.9N, long 12 10.8E, Mar 6. No spillage. Tugs on scene March 7 & salvage operations under way. (Wed. March 8 2000)

She Is Still Proud - - ........ as the very battered & war torn Japanese general freighter M/V ALONDRA RAINBOW, which was hijacked in the Malacca Straits last year, has just now called at Jurong Port in Singapore to unload her remaining cargo of 4,200 tons of aluminum ingots. The 8,000 GT ship was peppered with artillery shell & bullet holes after an Indian naval gun boat opened fire on it with 76.2 mm guns last Nov., forcing 15 Indonesian pirates to surrender after a 2 day chase that ended 270 miles off the coast of Goa. The ALONDRA RAINBOW had to be towed from India to Singapore as the pirates set fire to the engine room in a desperate attempt to sink the ship & evidence of the hijack when Indian naval personnel stormed the vessel. She is now on her way to Japan where owners are expected to repair the vessel. The 15 Indonesian alleged pirates found onboard the vessel when she was retaken by the Indian Navy, are awaiting trial in India. We should all just take one moment to respect the dead and to honor the crew of this brave ship. (Mon. March 6 2000)

Taiwan freighter M/V HUALIEN No.1 (4,010 gt, built 1984) has gone missing on March 1 along with her 21 crew near the Taiwan Strait. The disappearance has led to speculation that she was being held by the mainland Chinese. Shipping officials say an all out search by marine & naval authorities failed to show any signs of a shipwreck. HUALIEN No.1, carrying 5,300 tons of gravel, had initially been scheduled to arrive at Tamsui port, Taipei, from the eastern port of Hualien by Feb. 29. The sea was calm & wind light when the vessel set sail for Tamsui port. Of the 21 crew, 7 were Burmese, the rest were Taiwanese. A US$80,000 reward has now been put up for information leading to the whereabouts of the missing Taiwanese ship M/V Hualien No 1. A special alert has also been issued by the IMB regarding the vessel & its 21-man crew. The ship was carrying a cargo of river gravel when it disappeared near the Taiwan Strait. See the entire exciting story at our Vesse l Casualties & Pirate Activity Database on the web. (Mon. March 6 2000)

The petroleum tanker M/T SEBU carrying about 2.1 million barrels of crude has run aground in the Red Sea off Saudi Arabia without causing any injuries or spilling oil, the official Saudi Press Agency (SPA) reported on March 5. The 293,000-ton tanker ran aground about 2.5 miles from Rabigh port. The chartered vessel had been due to unload its cargo of crude at Aramco's Rabigh refinery. The vessel was refloated on March 7. (Sun. March 5 2000)

The petroleum barge Paula Lee is stranded on the Oregon Coast, near the historic stranding of M/V New Carissa (<<< please visit >>> http://www.cargola w.com/New_Carissa_Ship_Disaster.html <<< to see an amazing story & dramatic photos, ending in U.S. Navy gun action). A spill is feared (Sat. March 4 2000)

Air Force personnel rescued 2 crew from the British-flagged petroleum tanker M /T Johann Schulte hundreds of miles off the Atlantic coast after the men were injured in an accident that killed a member of their crew. The 2 crewmen from the 465-foot vessel were flown by helicopter Friday night to a hospital in Bermuda. One tanker crew member had been killed & 4 injured 2 March while trying to secure an anchor in rough seas. Twenty-foot swells & 40-knot winds had been reported in the area hundreds of miles east of Bermuda. Two who were hurt remained on board the tanker & did not require emergency care. The Air Force sent 2 helicopters & two C-130 cargo planes to Bermuda on 2 March after the Coast Guard requested assistance. (Sat. March 4 2000)

The Romanian freighter M/V Lugoj is listing sharply & in danger of capsizing in stormy conditions off the Dutch North Sea coast, the Royal Coast Guard says. A Belgian Air Force helicopter plucked 11 of the 17 crew members off the 6,000-ton vessel, which was listing at 30 degrees about 30 miles west of Hoek van Holland. A Dutch chopper is standing by on a nearby oil platform to collect the remaining crew members if necessary Two tug boats managed to secure the distressed vessel & are towing to shore in near gale-force winds & 8 foot waves. An attempt to right the vessel has been abandoned because it was close to capsizing. The freighter, carrying metallic cinders, had "problems with the loading," suggesting a cargo shift problem. (Sat. March 4 2000)

Australian high-speed ferry builder Austral Ships suffered a setback to its plans to revitalize its yacht-building subsidiary Oceanfast when a fire ravaged a near-completed A$40 million luxury vessel on Feb 29. (Sat. March 4 2000)

The Bahamas ore/bulk/oil M/V BEAR G. (43,487 gt) New York for Venezuela, in ballast, reported at 2000, local time, Feb 28, 130 miles east-south-east of Kingston, Ja, with explosion in engine-room. Presently in tow bound Kingston. One person dead & 4 injured. (Fri. Mar. 3 2000)

IMB said in an annual report released last month that world piracy worldwide surged 40%to 285 in 1999, with Indonesia accounting for 113 of the attacks. Most of the attacks -- 217 of 285 -- involved pirates boarding ships. (Wed. March 1 2000)

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


7. The Cargo Letter "Cyber Ports Of Call"

IMB Piracy Reporting Center Email: ccskl@imbkl.po.my

Wall Street Journal Logistics Report ......... as leading analysts & 16 members of top management examine the Global Transportation & Logistics sectors in this special 72-page ING Barings Global Transportation & Logistics Conference Issue.

Wall Street Journal Trucking Report

Atlas Air Interview By Wall Street Journal ........ part of the larger article, above.

World Trade Organization Meetings Schedule

Jobs In Logistics ..........an online job search & recruiting company designed exclusively for the logistics profession.

Truck Driving Jobs On Line

Air Traffic Control ......... get a free screen saver that simulates air traffic control radar.

The World Bank Electronic Trade Newsletter

Australia-New Zealand Direct Line .......... has new real-time Internet booking via direct connection to its backroom software. By contacting ANZDL's new facility the customer can now place a direct order with immediate confirmation on screen followed by an e-mail confirmation.

TNT .......the new website. TNT predicts that by 2002 over two thirds of its business will be conducted electronically, with the most significant part via the Internet. TNT has reviewed its Internet tools, such as tracking, pricing and collection, and renamed them according to function. Over 30 country sites are available in different languages and have been improved to include more detailed local information.

CargoNow ......... LSXS.COM, now CargoNow.com, is a Swedish Internet based logistics marketplace that connects transport providers with companies who use and/or purchase such services. It offers various logistics services online, &will shortly release a 'Tender' feature for regular cargo flows.

FreightDesk.com .......... a vertical portal headed up by Rob Quartel, a former Commissioner at the FMC in Washington D.C.

FreightGate Marketplace ....... happy 1st bithday!

Equilinx ........marine procurement gateway.

Click Logistics ....... markets as a "vitual shipping dept."

Distressed Cargo ......... commercial buyers, sellers & liquidators of general commodities and general merchandise often involving surplus, salvage, insurance losses, marine & inland cargo claims and excess inventories.

Go Trade Seafood

Women in Packaging Website

Roadway Express ...... the new site with updated tracking capabilities.

Int'l Credit Management Resources ......... a consultant tool kit.

London Iinsurance Insider

Brickell Report ......... Recommendations From The Hemispheric Dialogue In Envivronmentalty Sound Trade Expansion In the Americas. March 2000.

The Cartagena Protocal On Biosafety .........the Protocol's relationship to the WTO.

Phone Free ........ make PC to PC phone calls anywhere in the world, free.


OUR "E" Section: The Forwarder/Broker World


8. New U.S. Transport Related Legal Cases

Intertanko Wins In U.S. Supreme Court Case ___

The independent tanker owners' organization Intertanko has won the final round of its long-running court battle against the imposition of tanker restrictions different to federal law by Washington State in the U.S. Supreme Court. The court ruled that the state's regulations on crew manning & training, English language proficiency & casualty reporting were superseded by federal & Int'l laws and as such were therefore invalid. The remaining, more technical, requirements in the state legislation have been sent to a lower court for a review consistent with the Supreme Court's verdict & are therefore also likely to be dropped.

The case was launched in 1995, in a move which was "unusual in an industry association context" according to Intertanko's chairman Westye Hoegh, and passed through the U.S. District Court in Seattle & the Court of Appeal before being taken to the highest level possible in the U.S.

After its initial case was overruled the U.S. Dept. of Justice came out in support of Intertanko & assisted in taking the case to the U.S. Supreme Court. The ruling could bring similar legislation in, amongst others, Calif. under the spotlight.

The U.S. Supreme Court ruled unanimously that states can't enact design, safety & environmental standards for oil tankers that conflict or supplement federal regulations. The opinion by Justice Anthony Kennedy, based its decision mainly on the Port & Waterways Safety Act of 1972, which required the Coast Guard to issue regulations on tanker design and operation, as well as other regulations for vessel traffic & navigation.

The ruling struck down regulations the state of Washington enacted in 1994 to regulate tanker traffic along its coast & in Puget Sound. Legislation was aimed at protecting Washington's waters from a spill similar to the M/T Exxon Valdez oil spill in Prince William Sound in 1989.

The lesson for our cargo interests is that Federal (Int'l) maritime law will prevail over local or U.S. state rules. For NVOCCs & carriers, this is a good thing.

YUKON RECOVERY v. OCEAN MAR
U.S. Ninth Circuit Court of Appeal
Case No. 3/7/00 - No. 9836015

HELD: The 1st finder of shipwrecked cargo is entitled to exclusive salvage rights so long as it makes diligent efforts clothed in some prospect of successful salvage. Held on appeal that the District court correctly determined that maritime insurer did not abandon its claim to recover gold merely because 1934 technology was inadequate to raise it from the ocean floor. To read the full text of this opinion, go to: http://laws.findlaw.com/9th/9836015.html

9. Beachcomber Alert !

-- By Dr. Curt Ebbesmeyer for The Cargo Letter

I began publishing the Alert some 5 years ago to let beachcombers know what's afloat & washing up. The basic message is to find out what the sea is telling us in the flotsam that washes up worldwide. I believe that there is a message behind every piece found on the beach. At your feet is something from all over the world, if you can only recognize it. Like bird watching lighting up the forest, the beach comes alive when you learn to read what's there.

A lot of fascinating flotsam comes from lost containers. Here's a few examples. Five containers lost in Jan. 1990 held 80,000 Nike sneakers, one container lost in January 1992 held 29,000 bathtub toys (turtles, ducks, beavers & frogs), and 2 containers lost in Dec. 1994 held 34,000 hockey gloves. After falling overboard these containers opened (except one of the Nikes) in the mid-North Pacific Ocean. Currents then transported the flotsam all round the North Pacific.

Surprisingly, the Nikes were still wearable after 15 months in sea water. But Nike forgot to tie the shoelaces together so that beachcombers had to match up the pairs through extensive swap meets held up and down the West Coast. The toys became cult item collectibles in Alaska, and the gloves continue washing up. Much of the flotsam continued afloat into the Arctic Ocean where the ice, moving at about a mile per day is transporting it to the North Atlantic Ocean.

Each container loss provides oceanographic opportunities to study ocean currents. Oceanographers are lucky to send out a few thousand notes in bottles, so when a container opens with tens of thousands of items, there's the chance to study how the ocean spreads drifters with great numbers of drifters. One container lost off Land's End England held 5,000,000 LEGO elements, of which nearly 4 million floated. Each lost container holds great oceanographic potential.

Beachcombers love to understand where flotsam comes from & are very helpful in reporting it. The problem is that container shippers are very relu ctant to talk about losses because of legal and other issues. The result is that I cannot trace all but a fraction of the flotsam to the latitude and longitude & date where the drift started.

All I really need to know is how many and the starting time & location. From there we can use sophisticated computer models to track the flotsam. Where it goes greatly helps refine these models. I really do not care who is to blame and will not mention the ship or company if that's what's required to obtain just the facts of the starting coordinates.

What I've learned from reading the general literature is that some 100 million containers are shipped annually across the world ocean. Based on a graduate student thesis documenting the number of containers sighted afloat in the North Atlantic during two years, I estimate that some 10,000 containers are lost overboard annually. From the few spills I've had the opportunity to study, about one in 10 has some floatable materials, so that roughly 1,000 containers spill flotsam that we could use to trace ocean currents.

You might think that oceanographers have enough satellite buoys & other sophisticated drifters, but they only number less than 10,000 worldwide because each costs some US$10,000. So, having many other drifters presents many scientific opportunities. Though the container industry may want to discuss the losses, I think it is missing a valuable opportunity to cooperate with oceanographers to learn where drifters actually go.

Container flotsam is but a small part of the trash floating on the ocean. Vastly greater amounts come from fishing & land-based sources. Knowing where container flotsam goes will help study & document transocean trash. Accidents will continue happening & its wise to make lemonade if you have lemons.

Interested readers can subscribe to the "Beachcombers' Alert" by writing Dr. Ebbesmeyer at 6306 21st Ave. NE, Seattle, WA 98115. The Alert is published quarterly and may be received for $12 US annually. [Ed Note: The newsletter is GREAT! -- McD]

Dr. Curt Ebbesmeyer
curt@evanshamilton.com

10. Modern Pirates Still Plunder U.S. Ports

-- By Peter Buxbaum, an APBnews.com correspondent

NEW YORK (APBnews.com) -- Modern pirates may not have the flair of those in centuries past who flew the Jolly Roger & trolled the high seas in search of plunder, but they're just as successful.

And a favorite method of modern piracy is known as cargo diversion, which takes place in U.S. ports from Baltimore to Houston, from Savannah, to Long Beach, costing companies and consumers hundreds of millions of dollars each year. The concept behind cargo diversion is simple. A pirate posing as an Int'l trader buys legitimate goods for resale overseas, taking advantage of multitiered pricing policies that discount products destined for foreign markets. But instead of actually shipping the goods to foreign lands, they are diverted back to the U.S., where they can be sold at higher prices. Sometimes the dodge is as simple as loading up a cargo ship & setting sail toward some foreign destination -- only to turn the vessel around as soon as it's out of sight.

"Zeal To Open New Markets"

"Multinational businesses appear to be the most susceptible," said Bob Cozzolina, who investigates diversion cases for U.S. Customs. "You would think they would have the resources to take preventative measures. But it turns out that in their zeal to open new markets, they are not as cautious as they might be in developing business."

It's no surprise that major manufacturers appear to be easily bamboozled by diverters, said Cozzolina. "The people who do this are pretty good," he said. "The 'diverters' come into the company and say, 'We will market your product in country X. There is a tremendous market there, but the people are poor so you have to give us a competitive price.'" More often than not, said Cozzolina, the pirates will get the discount price. Medical devices, baby formula, prescription drugs & foodstuffs have been diverters' favorite quarries of late, he said.

A US$20M Conviction

While cargo diversion activity occurs around every major U.S. seaport, the areas around New Jersey's Port Newark & Port Elizabeth constitute the hub through which much of the diversion activity takes place, said Noel Hillman, an Assistant U.S. Attorney in Newark. It was Hillman who led the prosecution of the New York-area group headed by Steven LaSala, who was convicted in 1995 of defrauding pharmaceuticals manufacturers of US$20M by persuading a Syracuse businessman to allow his company to be used as a pipeline for diverted goods. LaSala served a 4 month prison term and paid about US$1.9M in fines. "New Jersey has an extensive infrastructure for international trade," Hillman said. "It has the service companies associated with trade in such concentration that the bad apples get easily mixed in with the good. The normal functioning of Port Newark provides the cover for these activities."

The Short Stop & U-boat Maneuver

The methodology of cargo diversion comes in 2 varieties: the short stop & the U-boat maneuver.

In the case of the short stop, container-loads of American goods are shipped to a warehouse, supposedly awaiting a sea voyage to Europe. But instead of being loaded onto a ship, the containers are diverted to a domestic wholesaler, and empty containers are shipped overseas. "The illegal domestic delivery must track what a legitimate transaction would look like," explained Hillman. "If the shipment is supposed to end up in Russia by way of Rotterdam, it makes sense as a 1st step for a container to be delivered to a warehouse in the proximity of Port Newark."

For the U-boat maneuver, U.S. products are shipped abroad & then brought back duty-free as "American goods returned." Such a scheme may violate U.S. law by falsely stating the country of ultimate destination on the Shipper's Export Declaration, according to Dennis Benjamin, program manager at the U.S. Customs Service. "Just because the goods touch some other country, it does not mean that that is the ultimate destination," he says.

Disguises & Aliases

According to Hillman, the diverters need at least 2 key players to pull off the scheme. "You need a warehouseman who will say the right thing if questioned," he said, "and you need a freight forwarder to provide false documentation that looks good." So prevalent is the practice in the industry, said Hillman, that there is an established going rate for generating the false documentation. Pirates have proved slippery because they tend to often change their stripes. "The perpetrators in the diversion game have to assume various guises, and they change their methods periodically," said Hillman. For example, LaSala used several different aliases & operated through various companies over a 10-year period, Hillman said.

Law Enforcement Fights Back

Currently, diverters use short stops for 80% of their shipments. But with investigators cracking down on false documentation, Hillman believes cargo thieves will resort to the U-boat scheme more often. As Hillman points out, the documentation in the U-boat maneuvers give the appearance of veracity because the goods are actually shipped abroad. While Hillman will not detail his office's investigative methods, he does confirm that documents are being checked. "We focus on bills of landing where we have other reasons to believe that they may be false," he said. "In addition, agencies that regulate export programs audit documents."

Finally, Hillman suggests that investigators will be keeping an eye out for "American goods returned" -- kind of the modern version of the Jolly Roger.

Reprinted from an article by Peter Buxbaum, an APBnews.com correspondent in New Jersey [an error occurred while processing this directive]