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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
- Exclusive Photos Now Tell The Story
--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
.....>>> https://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
- Cargo Law Website Continues A Major Hit! ........ as current
statistics confirm that The Cargo Letter Internet industry features of Los
Angeles logistics attorneys Countryman & McDaniel are at a record level
for 1999, currently serving over 4.5 million pages to Internet visitors per
year. For 24 hour breaking news on multiple channels, transport industry
reference, world customs information, freight exchanges & rate auctions,
maritime & aviation history, complete Int'l legal source information --
and much more -- there is no substitute for www.CargoLaw.com
While we now feature the fun of over 300 live cameras at air & sea
ports, there are also the very practical aspects of Cargo Claims Training
Modules for your staff and a world "Cargo Law Network" of
qualified attorneys in over 31 countries to consult on your overseas agent
& other legal issues. If you want to see our entire site ......... put
some time aside. We remain a free service to you we have served since 1978
in marine & logistics insurance (E&O, marine, aviation, customs,
motor truck, warehouse, & bill of lading liability & coverage
insurance issues) and our fellow industry members, friends &
transportation clients at large. We are quite proud of your 4.5 million
visits in the past year! Indeed, thank you, so very much! McD https://cargolaw.com
- China Inches Closer ....... as the Clinton Administration on 8
March submitted legislation to the U.S. Congress seeking permanent most
favored nation trade status (also called permanent normal trade relations,
or PNTR) for China. The U.S. & China concluded talks late last year on a
bilateral WTO accession package outlining the terms for market access and
other areas as part of China's bid to join the WTO. PNTR is a necessary next
step by the U.S. in the accession process as it would put China on par with
the U.S. & other WTO trading partners. It is unclear how the PNTR bill
will fare in the U.S. Congress. The only certainty is that the debate in the
House & Senate will be heated. U.S. business groups, including the
Business Round Table & the U.S. Chamber of Commerce, are pushing hard
for PNTR, while U.S. labor & environmental groups remain opposed to the
deal. China has indicated that it will continue to seek entry to the WTO
whether or not the Congress approves PNTR. China inched closer to WTO
accession after signing a market access deal with Argentina on Sat., 11
March, on China's entry into the WTO. The deal follows hot on the heels of
similar agreements with Thailand (on 10 March) & Colombia (8 March).
There are now only 9 Members left -- including the EU -- for China to broker
bilateral agreements with to pave its way for entry into the 135-Member WTO.
The US Dept. of Agriculture website has a great deal of information on the
U.S.-China trade deal, including the text of the agreement on agriculture
reached on 10 April 1999. http://www.fas.usda.gov/itp/china/accession.html
- Well, It's A Start ........ as Taiwan's parliament voted last week
to drop a five-decade ban on direct trade, transport & postal links with
mainland China, opening limited exchanges between offshore islands &
Chinese cities. Although largely symbolic in economic terms, the move
represented a political goodwill gesture towards Beijing following the
election as president of Chen Shui-bian, whose party openly advocates
independence. Analysts said the dropping of the ban -- if reciprocated by
Beijing -- would give Chinese companies a bigger slice of the business &
spur growth in Fujian Province. That would help support China's overall
economy.
- Singapore Opening Doors ........ as it's trade officials expect
Singapore & New Zealand to sign a free trade agreement by the middle of
this year. The agreement could signal the 1st of a series of bilateral
accords designed to drive forward liberalization in the Asia- Pacific region
amid stalled efforts by the Asia Pacific Economic Cooperation (APEC) forum
to forge a regional free trade area. Singapore is also holding talks with
Japan and has agreed to launch free trade talks with Mexico & Chile
(also APEC members).
- The Next Giant ......... as one of the largest carrier-based
logistics management companies in the world has been created through the
amalgamation of Mercantile & Sea-Land Logistics in the new "Maersk
Logistics." The new entity is aimed at extending the reach &
capabilities, both in terms of coverage and service, of the former units.
The merger realizes the combination of Sea-Land's strong presence in Canada,
Central & South America with Mercantile's identity in Europe, the Middle
East & Africa. This plan is set to form Maersk Logistics' new customer
base, where in Europe alone customers will be served by a network of 42
offices. In certain areas, such as the U.S. China, where both former
companies used to operate, Maersk will be capable of offering a more
extensive coverage. In China, Maersk Logistics will have a total of 13
offices. In Australia, Mercantile's established offices will give customers
greater access to services. Another plus of the merger is the increased
warehousing & distribution capabilities the new compan y will gain in
the U.S. through the unification of Mercantile's 4 facilities &
Sea-Land's single warehouse & distribution center. Mercantile's strong
presence in the Benelux & Scandinavian areas will also benefit the whole
customer base. A bonus for the new company is Mercantile's recent
acquisition of U.S. airfreight company, Allfreight, with its 8 offices
across the country.
- And The Next ........... as NFC & Ocean have merged to create
logistics giant "Exel," and announced plans to invest US$1.6B in
acquisitions to fill operational gaps in Germany & Italy. Combining
Ocean's air & sea freight experience with the warehousing and
distribution abilities of Exel Logistics, an NFC subsidiary, the 50/50
merger makes Exel the world's 2nd largest logistics organization behind
Deutsche Post. Ocean & NFC already work with almost 70% of the world's
250 biggest manufacturers. With combined revenues of US$5.6B and market
capitalization of US$4.4B, Exel is expected to generate savings of US$24M a
year after an initial 2 year period.
- But Not The Next........ as the U.S. Surface Transportation Board
has introduced a 15-month moratorium on railroad mergers due to recent
unsuccessful partnerships. Examples include CSX Transportation & Norfolk
Southern, two U.S. rails which failed in dividing the Conrail system
satisfactorily. And the merger of Southern Pacific & Union Pacific 2
years ago which produced congestion problems. The moratorium has
disappointed Canadian National & Burlington Northern Santa Fe who were
hoping to file for application for a merger this month. But now they will
have to wait until June next year when the STB will have drawn up a fresh
set of rules governing such activities. Robert Krebs, CEO of BNSF expressed
his dismay at over the ruling & claims that it is unfair that the 2
companies have had no option to present their proposal. Mr. Krebs said that
because other mergers were unsuccessful BNSF is having to pay the price. As
a result, BNSF may take legal action against the STB. The moratorium came
about after 4 days of hearings earlier this month during which shippers,
port officials, competing railroads & politicians complained of the
problems North America has faced due to ill-fated mergers in the past.
- Results of The UPS Buyback ........ as the company announced the
results of its tender offer to purchase shares of its Class A-1 common
stock. Final confirmation by First Union National Bank, the depository for
the offer, shows 68,312,335 shares of Class A-1 common stock were validly
tendered, all of which UPS accepted for payment. Pursuant to the terms of
the tender offer, each Class A-1 shareholder could tender up to 27% of his
or her Class A-1 stock (to a grand total of 100,893,277 shares) at US$60 per
share. The purchase of the shares in the tender offer was funded with the
US$5.27B net proceeds of UPS's Initial Public Offering.
- NCBFAA Wants To Automate Your Experience ......... as the National
Customs Brokers & Forwarders Associations of America wants to learn more
about the experiences that its members are having with U.S. Customs
Automated Export System. The system was developed during the past several
years as a way for Customs & the Census Bureau to receive export data
electronically, replacing paper filings of shipper's export declarations.
The Washington-based association said it plans to use the comments to help
it monitor problems and to report any new developments to the industry.
Comment to the NCBFAA by e-mail at : staff@ncbfaa.org
- Forwarder-Broker Solutions ....... as FreightDesk.com, a provider
of online services for Int'l freight intermediaries, and DCS Transport &
Logistics Solutions, a software developer for transportation, have started a
joint-venture 'The companies plan to integrate key application modules from
DCS's software which manages the import, export, and back office processes
of customs brokers & freight forwarders into FreightDesk.com's web-based
ASP (application service provider) service offerings. Forwarder &
customs brokers will now be able to simultaneously gain the workflow
management and connectivity benefits of FreightDesk.com and harness the
functionality and document management features of the DCS software system.
All of these services will be available on a transaction basis, making the
service accessible to even the smallest companies in the field. http://www.freightdesk.com/store_insider_03-15-00.html
- Transplace Quite A Place ........... as 6 U.S. trucking firms merge
their logistics units & form a Web-based market venture called
"Transplace.com" in a drive to improve efficiency and make better
use of available shipping capacity. Combining the units, which had logistics
revenues of US$650M last year, forms a company to rival Schneider National
Inc., North America's biggest truckload transport and logistics firm. The
venture will give the companies added purchasing power to reduce costs such
as fuel & equipment, and cut unused shipping capacity. Transplace.com
aims to bring together shippers & carriers worldwide to collaborate on
logistics, or transport & shipping, planning & execution. The site
will serve businesses looking to outsource logistics functions. The
participating companies are Covenant Transport, J.B. Hunt Transport
Services, M.S. Carriers, Swift Transportation Co., U.S. Xpress Enterprises
and Werner Enterprises. Each will pay US$5M cash, for an initial total
funding of US$30M. Shares of the companies rose in trading on 14 March, but
will see a one-time drop in revenues & earnings as the logistics
businesses are taken out of their income statements. Additional trucking
companies will be able to join as non-owner partners in the Dallas-based
venture. Transplace.com will initially focus on truckload, refrigerated
& intermodal capabilities, but will extend its services to include
less-than-truckload, package and parcel, air, cartage and home delivery, the
companies said. The 6 companies hold the following equity stakes in the new
venture: J.B. Hunt, 28%; M.S. Carriers, 14%; Swift, 16%; U.S. Xpress, 13%;
Werner, 16 %, Covenant, 13%.
- Roadway Looses "Oscar" ........... as on the night of
March 16 that all of the "Oscar" statuette awards for the 2000
Academy Awards ceremony were stolen from the Los Angeles (City of Bell)
inbound loading dock of Roadway Express, a national LTL carrier. 53 of the
55 lost statues were found on March 19, in a dumpster behind a "Food 4
Less" store in Korea Town by a Mr. Willie Fulgear who will now receive
a US$50,000 reward from Roadway. Willie was an honored guest at the
"Oscars" ceremony in Los Angeles last Sunday. Veteran Roadway
Express driver Lawrence Edward Ledent of Los Angeles was charged with
stealing the Oscars, which were later recovered from the trash bin by
Willie. He has pleaded innocent to a single count of grand theft. Company
officials charge that Ledent stole the shipment the same day it arrived in a
warehouse in Bell, Calif. Prosecutors declined to charge a second Roadway
employee pending further investigation. "Rest easy", Roadway
Express! But where are those other statuettes?
- Roadway Gets Hammered By V.P. Gore .......... as Roadway Express
was selected as the recipient of the prestigious Hammer Award from the
federal government. The award was presented by Vice President Al Gore at a
ceremony in Laredo, TX, which is the largest port of export in the U.S. Bob
Carr, vice president, international and Sandra Scott, international trade
and customs advocate for Roadway, accepted the award on behalf of the
Company and its employees in the U.S., Laredo & Nuevo Laredo, MX
facilities, who made a considerable effort to make the Automated Export
Service (AES) project successful. Roadway won the Hammer Award for its
innovative work with government agencies and the Association of Laredo
Forwarding Agents to improve the effectiveness of AES, which tracks
shipments crossing the Mexican border. AES creates a standard electronic
format for exchanging transportation & commodity information. This
reduces paperwork, eliminating the Shipper Export Declaration (SED). It also
reduces errors in data entry and creates a more timely flow of information
and helps keep shippers informed about the status of their freight as it
crosses the border through Electronic Data Interchange (EDI) via AES. Vice
President Al Gore developed the Hammer Award to highlight success stories in
government reinvention to make the public sector more efficient and
responsive than in the past, when government agencies paid up to $400 for a
simple hammer. Fittingly, the award consists of a US$6 hammer, ribbon &
note from V. P. Gore, all in an aluminum frame. In return V.P. Gore was
presented with a lovely statuette by Roadway, just like the ones given out
at the annual Academy Awards ceremony in Hollywood. What a coincidence! :-)
- Crooked Dutch Roads? .......... as transport companies in the
Utrecht region in The Netherlands have defrauded the Internal Revenue
&the social security bodies for 'tens of millions of guilders', so an
investigation demonstrates. Among other things, they draw up fake invoices,
work with underpaid foreign truckers, fiddle with social security premiums,
& employ on paper fewer people than they actually do. So states the
Regionaal Interdisciplinair Fraudeteam Utrecht (RIF) (Utrecht Regional
Interdisciplinary Fraud Team), which last year conducted investigations in
69 haulage companies in the central area of The Netherlands. According to
the fraud team it has again been proven that the haulage sector is
'fraudulent to a considerable extent,' a picture which previously also had
emerged from other investigations.
- Schneider Logistics Will Make Them Pay ........ as the subsidiary
of LTL carrier Schneider National Inc., has acquired the freight payment
services of Tranzact Systems Ltd., a freight payment business that processes
more than US$4B in payments a year. The company will be named Tranzact
Payment Services. Terms were not disclosed. With the purchase, Schneider
said it's the 1st in the logistics industry to create a stand-alone freight
payment business unit which allows customers to purchase freight payment and
audit as a separate service.
- GoCargo & Quoteship? ......... as these online exchanges, and
many more, where shippers can receive & compare shipment quotes from
transportation companies -- can be found at our special The Cargo Letter
site. See all the buzz. https://cargolaw.com/d2.load_matcher.html
- LTL Software Goes Windows ........ as Roadway Express introduces
its new Windows based, Web-enabled version of "ExpressWORKS," the
Company's transportation software for the LTL industry. Now upgraded from
the DOS platform to the Windows environment, the new ExpressWORKS provides
customers increased ease in both installation and operation. The software
package, distributed on CD-ROM, combines shipment information & tracking
technology. Integrating PC software & Web applications, the program
houses 2 modules on the desktop -- Bill of Lading & Rate Quotes -- while
a web link provides customers the ability to track shipments, view open
invoices & check claim status at any time with updates only one click
away. An easy-to-follow, interactive tutorial guides shippers through the
steps of creating bills of lading, running rate quotes and creating
databases. The Company's Customer Information Services Help Desk staff is
available 24 hours a day to answer any technical questions. http://
www.roadway.com
- LTL Chief Goes "E" ........ as John P. Lanigan, Jr.,
former COO of Schneider National, Inc., has been named president of
Logistics.com, an ICT company in the logistics filed. Logistics.com has 4
business lines: multi-attribute auction systems, shipper transportation
management, carrier decision support systems, & the Digital
Transportation Marketplace. http://www.logistics.com/
- U.S. Customs Reg. Roll Out ......... as it has finally issued its
new rules for how customs brokers must conduct their business, after nearly
a decade of debate & negotiation with the industry. The rules, known as
Part 111 of the Customs regulations, more narrowly define what is
"customs business," a line that has become increasingly blurred in
recent years by other types of firms providing services to importers, such
as consultants, accountants and law firms. The National Customs Brokers
& Forwarders Association of America was the primary broker group to
negotiate the revisions with Customs. The changes to broker regulations were
required in the North American Free Trade Agreement Implementation Act &
to fit the reorganization of Customs. The biggest change is the ability for
brokers to apply for national permits, which allow them to conduct business
where they do not have district permits. National permits also allow brokers
to put employees in the offices of importers, known as "implant"
operations. Broker employees will be able to process import documents on
site, but they still must forward them back to the licensed broker's office
for final import entry with Customs. With National permits, brokers may also
file electronic drawback claims from where they may not hold district
permits. Customs has set up 8 drawback offices around the country for
brokers with national permits to file their drawback claims. In addition, a
national permit allows one broker to file an entry & another to perform
post-entry summary work. "This provision will give importers greater
choice in selecting a broker to handle a particular aspect of an import
transaction," Customs said. The national permit also makes it easier
for brokers to participate in the agency's National Customs Automation
Program (NCAP), a prototype of its future Automated Commercial Environment.
To acquire a national permit, a broker must have at least one district
permit. It must also file an application to Customs' Washington
headquarters, listing the license number and issuance data, the office and
name that will oversee the national permit operations, and evidence that the
US$100 permit & US$125 annual permit user fees have been paid. Under the
revised Part 111, brokers no longer need approval for how they store their
import records. This accommodates new computer-based storage capabilities.
Brokers must only notify Customs where their records are kept. The new rules
give prospective brokers greater flexibility for when & where they take
the test and apply for a license. Customs also used the revision process to
clean up & delete outdated language in its regulations. Customs warns
that penalties for acting in the capacity of a broker without a license can
lead to severe penalties. The agency will issue a US$10,000 fine for each
incident, up to $30,000. The agency said the revised Part 111 will be
published in the Federal Register. The rules take effect April 14.
- Customs On The Carpet - Playing Favorites?.......... as a new study
by Wirthlin Worldwide claims that the U.S. Customs Service fails to properly
process the vast majority of all express shipments coming into the U.S.
through the U.S. Postal Service (USPS), resulting in a loss to the U.S.
Treasury of more than US$1B. The independent study was released by the Air
Courier Conference of America (CACAO), the trade association representing
the air express industry. The Worthily study finds that Customs properly
inspects & assesses duties and fees on only 6% of USPS shipments, while
rigorously implementing these responsibilities for nearly 90% of the express
shipments handled by private carriers, such as UPS & FedEx. In addition
to detailing the huge loss in revenue to the government and highlighting
anti-competition concerns, the study raises serious questions about the
Customs Service's efforts in enforcing narcotics and money laundering laws.
The study states that the findings provide " ... conclusive proof that
Customs does not fulfill its statutory mission with respect to dutiable mail
shipments. The data show that Customs ignores its obligation to appraise,
classify, & collect duties on Int'l mail shipments."
- Oily Bust ......... as U.S. Customs has announced the arrest of 3
businessmen in San Diego, who had attempted to buy illegal Iraqi oil in
violation of the 1990 embargo order. Customs had been tracking the
activities of Amnard Vorachard & Surasak Nanaukool of Thailand, &
Simon Tan of Singapore for about 4 years. Through numerous phone calls,
faxes & e-mails, the trio negotiated with undercover Customs agents to
buy 160,000 metric tons of Iraqi oil. As part of the conspiracy, they
arranged for the oil to be delivered to Thailand in two 80,000-ton tankers.
A Cayman Island front company was set up to handle the oil. They planned to
acquire false "Certificates of Origin" to sell it on the market.
- Consensus On Required Entry Changes .......... as Representatives
of the U.S. Business Alliance for Customs Modernization (BACM), the National
Customs Brokers & Forwarders Association of America, the Joint Industry
Group & the American Association of Exporters & Importers
established common views on revising the Customs import entry process at a
"trade summit" in Washington this month. The groups agreed to 4
areas of change in the import entry process: * Minimal data requirements at
time of cargo release. * Periodic filing of aggregate import information. *
Reasonable data correction time (up to 18 months). * "Final
declaration" in 12 months. They also supported the "credit card
statement" concept for paying duties. The industry groups will
integrate these points into their individual position papers to Customs.
Industry officials say it's a monumental step for different industry groups
to agree on major Customs operational issues. "The only reason it's a
big deal is because we don't do it more often," said Jon H. Kent of the
NCBFAA. Customs initiated the Entry Revision Project last year to bring the
agency's processes more line with today's business practices. Customs and
the industry groups hope to incorporate proposed entry revisions into a
miscellaneous trade bill in May.
- Panalpina Settles Antiboycott Fine .......... as the U.S. Commerce
Department has imposed a US$20,000 civil penalty on Panalpina's humble,
Humble, Texas office to settle allegations the freight forwarder committed
10 violations of antiboycott provisions of the Export Administration Act
(EAR). In 1996, Panalpina provided shippers in Saudi Arabia information
about other shippers' business with Israel. "Furnishing such
information for boycott purposes is prohibited by the EAR," Commerce
said. The EAR's antiboycott provisions prohibit U.S. companies from
complying with certain aspects of unproved foreign boycotts against
countries friendly to the U.S. These cases are managed by Commerce's Office
of Antiboycott Compliance.
- Sino-Citric Boycott Ended ......... as the 1st shipments of
U.S.-grown citrus in 20 years will be arriving in Beijing & Shanghai
this weekend. U.S. producers were prevented from selling their fruit in
China in 1980, when Mediterranean fruit fly infestations were discovered in
shipments. China's agreement to open up its market to U.S. citrus happened
after Chinese agricultural officials spent 2 weeks in January touring citrus
groves in Arizona, California, Florida & Texas. We assume aslo
Disneyland.
- Circle Int'l Takes French Partner ......... as it has formed an
alliance with French logistics provider Mory S.A. Both companies expect to
benefit from the alliance. Circle will get access to an extensive local
service network in France, while Mory is able to expand its reach
internationally through Circle's global network. Mory is a private firm with
4,700 employees & 150 offices in Europe. San Francisco-based Circle has
4,500 employees with 300 offices in 100 countries.
- ABX Logistics Gets Dubois .......... as the logistics subsidiary of
the National Company of Belgian Railways, has acquired French transport
& warehousing group Dubois. Terms of the takeover were not disclosed.
Dubois has annual revenues of US$510M, 3,500 employees & some 600,000
square meters of warehouses. Dubois' activities cover European transport
& logistics.
- Fritz Buys Self ......... as the San-Francisco based forwarding
giant Fritz Companies, Inc. says that its board of directors has authorized
the purchase of up to US$20M of the company's common stock. "We believe
that recent events in the securities markets contradict what we believe to
be the near term outlook for our business & the customers we service,
therefore our security represents an excellent investment," said Lynn
C. Fritz, chairman & CEO. It's a positive sign for the company to show
such confidence in itself.
- Sun Shine - U-Fine .......... as the U.S. Commerce Dept.'s Bureau
of Export Administration has imposed a US$20,000 civil penalty on U-Freight
for illegally shipping computers to China. The South San Francisco-based
freight forwarder made the shipment for Sun Microsystems in Sept. 1993. The
shipment lacked the required Commerce export license. While neither
admitting or denying the allegations, U-Freight agreed to pay the penalty,
of which $10,000 was suspended, Commerce said.
- Dutch Bitch Avoids UK Quarantine ........ as a Shetland Sheepdog
called Lucy became the 1st dog to be flown into Britain under new pet
passport laws. The one-year-old bitch arrived at London's Heathrow airport
last week from Amsterdam to be reunited with her Dutch owner Claire Moskvin.
The new laws mean cats & dogs from selected European countries can enter
Britain without having to spend six months in quarantine provided they have
had a blood test, a rabies vaccination and a valid identity microchip
inserted in their neck. The scheme was introduced last month at Channel
ports but it has taken longer to set up procedures among airlines.
- Authorities Come Down Hard On Smugglers ........... as police in
southern Albania made a record haul of 5 million contraband condoms from
Greece with a street value of US$700,000, it was reported on March 17. The
truck driver told police his cargo was exempt from customs duty as they were
a gift from humanitarian groups to encourage safe sex among the impoverished
Balkan nation's 3.3 million people. The condoms are being guarded by police
while authorities decide what to do with them. Albania is trying to crack
down on smuggling -- especially of fuel, cigarettes & coffee -- since
customs duties account for some 60% of budget revenues for the entire
country.
- Smuggling - The Oh, So Very Hard Way ......... as surgeons in Peru
operated on a woman who smuggled an automatic pistol into a high-security
prison by concealing it in her rectum but was unable to remove the gun from
its hiding place. Tirsa Ruiz slipped the 7.65 mm pistol past security checks
at Bogota's La Picota prison on a March 3 visit to a suspected leftist rebel
prisoner. But once inside the prison, she realized the gun was stuck.
Claiming she was pregnant, Ruiz, 43, complained of acute stomach pains &
was taken to a hospital. She stayed there for 3 days, the gun firmly lodged
inside her. Surgeons finally removed the pistol after Ruiz confessed to the
real cause of her discomfort. She is recovering in the hospital under police
guard, charged with illegal weapons possession. Prison guards say visitors
have often used body cavities to smuggle drugs & liquor to inmates since
a court ruling last year banned intimate body searches. We're glad Tirisa
used a trigger lock.
- Eurotunnel. UP for the operator of the high-speed transport system
linking the UK to Continental Europe through the Channel Tunnel. Operating
profit up 17%. In 1999, operating revenue increased to (pound)627 million.
Shuttle revenue ((pound)271 million) has increased by 31%
- FedEx Corp. UP for the 3rd quarter with revenue of US$4.5B, up 10%
-- Operating income of US$206M, up 36% -- Net income of US$113M, up 45%.
- Frans Maas Group NV. UP 13% to EUR 16.7M in profit for 1999.
- GeoLogistics. DOWN with a net deficit of US$28M for the 1st 9
months of 1999, compared to a net loss of US$8M in the corresponding period
of 1998. GeoLogistics has just obtained a Russian national customs broker
license.
- Hyundai Merchant Marine. UP as it nearly tripled its net income for
1999, to US$126M, due primarily to an increase in non-operating items.
Operating income fell 27% in 1999, to US$299M.
- Hapag-Lloyd. UP for the 1998/99 year, with operating profit of
DM588 million, up 70%.
- Interpool, Inc., the world leader in container leasing. DOWN as
1999 4th quarter net income, before non-recurring and extraordinary items,
was US$7,600,000 or $0.28 per diluted share, as compared with net income of
$10,075,000, or $0.35 per diluted share, for the same period in 1998.
Revenues during the 4th quarter of 1999 were US$60,176,000, as compared to
$48,863,000 in the fourth quarter of 1998. Operating income was $22,709,000
in the quarter versus $25,715,000 for the same period last year. Interpool
is the corporate sponsor of The Cargo Letter Library & Archive pages.
- Mercury Air. UP with healthy profits for the 1st half of the
current fiscal year. Revenues stood at US$158.2M, up 45% on the year-earlier
period, generating a gross profit of US$17.9M, up 15% & a net profit of
$3.6M up 2.2%. Mercury Air is headquartered in Los Angeles.
- Neptune Orient Line. UP as it rebounded with a strong 2nd half to
achieve US$49M in profit for the year ending Dec. 31. Overall net profit in
the second half of 1999 was US$88M, compared with US$6M in the 1st half of
1999.
- NS Cargo. DOWN with a loss of US$2.5M in 1999.
- Orient Overseas (Int'l) Ltd. (parent company of OOCL) UP with net
profits of US$62M for 1999, compared to a net loss of US$300,000 in 1998.
The results for 1999 mark a return to the black for the Hong Kong-based
shipping group, following a small deficit in calendar 1998 and in the 1st
half of 1999. Annual operating profit for 1999 was US$111M, a 131% increase
on the US$48M profit in 1998.
- P&O Nedlloyd Container Line. DOWN a 19% drop in its 4th-quarter
pre-tax profit, to US$17M & a widening of its annual deficit, to US$51M
last year, compared with US$2M in 1998. For the 4th quarter, operating
profit decreased by 44%, to US$31M. Revenue went up by 12%, to US$986M, as
volume carried also rose by 12%, to 739,100 TEUs. For the year, operating
profit plunged from US$81M in 1998 to US$7M last year, a fall of 91%.
Revenue for the year was US$3.7B, up 7% on the 1998 revenue. P&O
Nedlloyd carried 2.8 million TEUs in 1999, an increase of 13%, but average
revenue per TEU was down by 5%, to US$1,302. P&O Nedlloyd said that the
higher cost of fuel had an adverse effect of US$35M on its results in the
4th quarter.
- Pacer Int.l. UP as the North America freight transportation &
logistics services provider, reported consolidated gross revenues for the
fiscal year 1999 of US$917.4M, up 55%. Operating income increased by
US$14.8M or 45% to $48.0M.
- Sabena SA. DOWN for the Belgian airline, as it had swung to a net
loss of 14 million euros (dlrs) last year from a 22 million euros (dlrs) net
profit in 1998.
- Schenker. DOWN as its operating profit fell 26% in 1999, to US$93M.
- TMM Line. UP as net profit shot up to US$223.6M in 1999 from 16
million in 1998, after restructuring.
- IATA Financial Summit .......... as IATA will hold its annual
Airline Financial Summit, April 4-6, 2000, at the New York Marriott World
Trade Center Hotel. 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&d 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 be featured. IATA director general Pierre Jeanniot, who will
give the opening keynote address, said: "The airline industry has spent
50 years in refining its unrivaled systems and its attractiveness &
convenience to consumers. It should spend the next 50 years in making some
money at long last!" Other confirmed speakers include: Derek Stevens,
CFO, British Airways; Douglas Hacker, CFO, United; John Watson, director
general, SITA; Perry Golkin, Partner, Kohlberg Kravis Roberts; Riyaz
Peermohamed, CFO, Emirates. The Airline Financial Summit provides a unique
opportunity for airline CFO's to meet with investment analysts, fund
managers & the investment banking community. More than 60 airline CFOs
will be at the Marriott for the separate, private, meeting of the IATA
Financial Committee. http://www.iata.org
- TIACA Headed for Another Record-Breaking Exhibition at ACF2000
......... as the 20th Int'l Air Cargo Forum & Exposition 2000 in
Washington, D.C., is still more than seven months away, yet 85% of the booth
space for the exhibition is booked. Companies wishing to exhibit at ACF2000
should e-mail weldyexp@bellatlantic.net. ACF2000 is set for September 27-30,
2000, at the Marriott Wardman Park Hotel in Washington, D.C. The theme this
year is "Dawn of the Air Cargo Century." ACF2000 will be the 20th
biennial event, representing 40 years of leadership of TIACA & its
predecessor organization in providing the forum for industrywide leaders to
identify and assess issues and solve problems. TIACA conducted its 1st
independent ACF in Luxembourg in 1992, followed by biennial forums in
Seattle (1994), Dubai (1996) and Paris (1998). Over 200 companies will
exhibit at ACF2000 with 345 booths. The event draws thousands of executives
from all sectors of the industry, about 80% of them presidents, CEOs,
executive vice presidents & directors of cargo - the decision makers.
The networking & business atmosphere of the exhibit area is recognized
as the best in the industry. ACF is the prime biennial event in the air
cargo industry calendar. In both 1996 & 1998, more than 3,000 delegates
and exhibitors participated in the popular industry event. TIACA, which acts
as the catalyst and the voice of the air logistics industry worldwide,
includes as members top executives from major aircraft manufacturers,
airlines, airports, integrators, shippers, & freight forwarders from all
parts of the world. http://www.tiaca.org
- FAA Sees Fair Cargo Skies ......... as the U.S. Federal Aviation
Administration (FAA) has predicted that U.S. air freight will almost double
within the next decade. As a result of rising demand for freight entering,
leaving or being transported within the U.S., the organization predicts that
85 new freighters will be introduced to the U.S. fleet by the end of 2001.
The FAA also predicts cargo revenue-ton-miles (RTM) will increase from an
estimated 28 billion last year to about 51 billion in 2011. This year alone,
the FAA predicts that cargo RTM will rise by 6% to 29.7 billion. Last year,
the industry saw a 1.5% decline in RTM owing to the lingering effects of the
Latin American & Asian economic downturns.
- Open Colombian Skies .......... as the U.S. has signed an aviation
liberalization agreement with Colombia that frees cargo airlines from either
nation to fly to any city in the U.S. or Colombia without limitation. The
"open skies' pact on cargo services is effective immediately, the U.S.
Dept. of Transportation said. Greater passenger services between the U.S.
& Colombia, including 21 additional weekly frequencies, will be phased
in over the next 3 years. The new cargo agreement likely will promote more
competition from airlines wanting a piece of the booming cut flower export
market in Colombia. A similar agreement was signed between the U.S. &
the West African nation of Ghana on 20 March.
- Delta No Longer An "Air Line" ............ as the carrier
has announced a new identity for itself. Delta will remove the words
"Air Lines" from its logotype and will now display just the word
"Delta" on all its aircraft, vehicles & facilities. This
reflects the airline's confidence in the strength of its brand, and the fact
that most customers refer to the airline as "Delta." There is also
new livery which features a dramatic change to the tail of Delta's aircraft
to display a ribbon-like design that is supposed to evoke motion.
Photographs of Delta's B777 aircraft in its new livery are available on the
Internet. http://www.delta-air.com/inside/newlook/index.jsp
- El Tower? .......... as Israel's national airline El Al has held
talks with troubled U.S. airline Tower Air, which could lead to a possible
investment, El Al spokesman Nachman Klieman said. He said discussions with
Tower, which filed for Chapter 11 bankruptcy protection in February, would
cover "cooperative agreements, possible partnership or investment of El
Al in the company."
- Big Mail .......... as TNT Post Group, the British Post Office
& Singapore Post have announced plans to launch a joint venture in
cross-border mail. The 1st of its kind, the alliance will create the world's
largest business mailing partnership, with expected annual revenues of
US$450M. TNT Post - parent company of the Dutch Post Office & express
carrier TNT - will own a 51% share, with British Post & Singapore Post
each taking a 24.5% stake. Headquartered in Belgium, the mailing venture
will service 200 countries around the world. Deeper cooperation between the
3 participating posts is also expected to expedite the development of
domestic networks.
- Bigger Mail ......... as the UK Post Office has purchased
Nederlandse Pakket Dienst (NPD), the 3rd largest parcel company in the
Netherlands, in an overall deal worth US$140M. It also bought Pakke-Trans
A/S in Denmark. The Dutch company handles approximately 60,000 parcels a day
& its acquisition significantly boosts The Post Office's competitive
edge & presence in the European parcel distribution market. NPD is an
independently owned parcel distribution company servicing all of the
Netherlands & is part of the General Parcel Network accessing all of
Europe. The Post Office also bought Pakke-Trans A/S, one of Denmark's
leading parcel distributor companies, in a deal worth US$25M. Pakke-Trans
A/S is an independently owned parcel distribution company serving Denmark
and is part of the General Parcel network accessing all of Europe.
Pakke-Trans is one of the biggest parcel distributors in Denmark with 13% of
the domestic market. Post Office UK earlier bought German Parcel & Der
Kurier in Germany, Williams Group in Ireland, Crie group in France, Citipost
Group based in New York & General Parcel Austria (including General
Parcel Slovenia).
- Bad Mail Example .......... as United Parcel Service announced this
month that Congress should not allow the U.S. Postal Service to follow the
bad example set by Germany's postal service, which is using its monopoly
profits to gobble up private-sector companies & compete unfairly against
private express carriers.
- But There Deutsche Post Goes Again Anyway ......... as
acquisition-hungry Deutsche Post has taken over Herald Int'l Mailings Ltd.,
one of the U.K.'s 3 largest private Int'l mail distribution companies.
Deutsche Post said that the acquisition will strengthen its presence in the
UK & enable it to provide value-added mail services to its customers
located there. Herald has 150 employees & an annual revenue of US$23.2M.
The acquisition is Deutsche Post's 1st European mail purchase & follows
the recent acquisition in the U.S. of two similar companies, Global Mail
Ltd. & YellowStone Int'l Corp.
- Air Loss Up ............. as the number of accidents &
fatalities involving U.S. registered airline & commuter aircraft rose
last year. A report by the National Transportation Safety Board said 12
people died last year in accidents involving commercial aircraft that carry
at least 10 passengers. That includes 11 people who were killed when
American Airlines Flight 1420 crashed in Little Rock, Ark., last June. In
1998, there were no airline passenger deaths for the 1st time in the history
of U.S. commercial aviation. The number of air taxis accidents fell by one
in 1999 to 76, and fatalities dropped from 48 to 38. General aviation
accidents also fell by one last year, to 1,908, and the number of fatal
accidents dropped to 342 from 365. Although the number of general aviation
accidents decreased, total fatalities increased slightly, from 623 to 628.
There were 12 commuter airline deaths in 1999; there were none in 1998. Some
critics said the study does not reflect the full range of American air
accidents that took place last year.
- Fuel Situation to Worsen ......... as the Air Transport
Association, the Washington, D.C. based interest group representing major
U.S. air carriers, has issued a forecast predicting that airline fuel costs
will rise more than 40% this year over last year. The ATA estimates that the
U.S. airline industry will spend US$14.6B on jet fuel this year compared to
$10.2B in 1999. "This rise of $4.4B in fuel costs stands in dramatic
contrast to the U.S. airline industry's 1999 net profit of $4.85B," the
ATA said. In the 1st quarter, the average price paid by U.S. airlines for
jet fuel jumped 75% to 77 cents per gallon from 44 cents a gallon in the
same period last year. And in other bright news, the European Commission is
recommending that EU member states implement a tax on fuel consumed by
planes flying to, within & between EU states. What are they thinking?
- US$5M, Not So Fine ......... as Miami-based all-cargo carrier Fine
Air Services & air cargo company Aeromar have pleaded guilty to 5
charges of obstructing justice & making false statements related to a
federal investigation of a Fine Air freighter crash in 1997 that killed 5
people. The 2 companies will pay US$5M in criminal fines. Fine will pay
US$3.5M. Both companies are subject to 4 years' probation. Fine admitted
that some of its supervisors ordered employees to change manifests in the
days after the crash and that it lied to federal regulators about aircraft
inspections. Aeromar admitted to taping over warehouse surveillance cameras
& to destroying cargo weight documents. Fine Air Flight 101 crashed just
after takeoff from Miami Int'l Airport, killing 4 crew members & one
person on the ground. Federal investigators ruled that pilots lost control
of the DC-8F after several unsecured pallets of fabric shifted during
flight.
- New Zealand Says "No Way" .......... as the government
has effectively refused to allow Singapore Airlines to buy a stake of up to
40% in national carrier Air New Zealand. Prime Minister Helen Clark's office
said on March 16 that Clark "gave no commitment" on Singapore's
request at a meeting March 16. Clark said she saw problems with such a deal.
Singapore Airlines is in negotiations with Brierley Investments Ltd. on the
sale of a 17% stake in Air New Zealand. Any holding of more than 25% has to
be approved by the New Zealand government. Singapore Airlines CEO Cheong
Choong Keong was in Auckland as part of the discussions. He met with the
government, which negotiates Int'l landing rights on behalf of the airline.
If Brierley sells its Air New Zealand Class-B shares, which can be held by
non-New Zealand residents, to Singapore Airlines, it would give SIA a 17%
stake in Air New Zealand. Brierley's stake would be reduced to around 30%.
- But Canada Not Saying ......... as recent merger of Canadian
Airlines & Air Canada has left some forwarders confused as to how &
when their goods are being handled. Some parties using the newly merged
company, such as Canadian Worldwide Express, have expressed concern over
what the new arrangements will be regarding the transportation of their
freight into Canadian cities. However, Canadian Airlines & Air Canada
did offer some route information in February suggesting further data will be
revealed in the near future, thereby easing concerns.
- Canadian Airlines Not "one" With The World ......... as
it is to withdraw from the oneworld alliance, with effect from June 1.
Canadian Airlines is a founding member of oneworld, along with American
Airlines, British Airways, Cathay Pacific Airways & Qantas. Canadian
Airlines announced late last year that it would withdraw from oneworld after
it was purchased by Air Canada.
- KLM Stands Back .......... as reductions to be carried out this
month & again in Oct. are aimed at cutting Dutch operator KLM's capacity
by up to 10%. The measure comes as part of a cost-cutting strategy. KLM will
cut total freight space by 3% this month and slash a further 7% later in the
year, with services to Gatwick, Karachi, Riyadh, Jeddah, Basle & Baku in
the 1st wave of cuts.
- Delta To Viet Nam ......... as it has filed an application with the
U.S. Dept. of Transportation seeking authority to provide codeshare service
from the U.S. to Ho Chi Minh City & Hanoi, Vietnam. The new Delta
service to Vietnam will be provided on flights operated from Paris by Air
France, Delta's global alliance partner.
- U-T & The Baron ........ as Lufthansa Cargo has signed a global
partnership agreement with California-based forwarder Union-Transport. The
two Int'l companies have agreed to provide joint services to customers
worldwide. Initially, they will be operating together in the U.S., Germany
& India with other countries to be added when appropriate. The two
experience in working together with Union-Transport acting as a local
partner for Lufthansa in Germany. Development programs & collaborative
employee education will be the focus of the partnership.
- BA Makes 1st S.A. Buy ........ as after entering into a partnership
with South African Comair in Oct. 1996, British Airways finalized its
acquisition of a 18.3% stake in the airline for US$28M. Comair has been
listed on the Johannesburg Stock Exchange since July 1998 - it was the 1st
airline in South Africa to do so. Comair was BA's 1st franchise outside
Europe. BA said the investment showed the airline's confidence in South
Africa. Currently Comair operates between Johannesburg & Cape Town,
Durban & Port Elizabeth, and between Cape Town & Durban. It also has
regional services to nearby countries Namibia, Zimbabwe & Zambia. In
related news, Bob Ayling, the CEO of British Airways, has announced his
resignation in order to make place for a new chief who can better deal with
the new e-markets to come.
- BA Continues Shake Out ......... as Kevin Hatton, managing director
of British Airways World Cargo for 7 years, will retire from the airline at
the end of May. Hatton's departure comes after Robert Ayling was forced to
leave BA's CEO spot amid losses at Europe's biggest airline. Gareth
Kirkwood, managing director of BA subsidiary Brymon Airways, will replace
Hatton.
- Freighter Down ........... as a Sri Lankan cargo plane with 8 crew
aboard crashed near the Int'l airport on March 24, killing 6 people &
wounding the other 2. The AN-12 aircraft was coming from Bangkok, Thailand,
and was about to land in bad weather when it crashed in the Kadirana area,
near the airport. The Katunayake Int'l Airport is 20 miles north of the
capital, Colombo.
- Airship Made For Airship Maker? ........... as Airship Operations,
Inc., has announced a US$6.4M contract for a "Skyship 600 B"
airship to be provided to CargoLifter, Inc., the German based airship
designer & manufacturer. The contract includes a training package
designed to help CargoLifter achieve German approvals for the operation of
airships. CargoLifter is developing airships for the efficient
transportation of extremely large and/or particularly heavy loads over long
distances and with an ability to operate in remote areas without landing
fields or adequate roads. The Airship Operations Skyship 600 B will be used
to help CargoLifter to prepare for its future operations. Airship Operations
will build the Skyship at a hangar facility in Cardington, England. A test
flight is expected in late April. The training program will begin after the
completion of test flights in the UK The ship will depart England and cross
the English Channel for its new home base in Brand, Germany, where
CargoLifter is building the world's largest hangar facility. We have a live
TRANS-CAM at Cargolifter ..... https://cargolaw.com/cameras.html
- FedEx Speaks Chinese On Line .......... as it has enhanced its
global online shipping application, FedEx interNetShip, with the addition of
traditional & simplified Chinese language. It enables customers in Hong
Kong, Taiwan & mainland China to ship electronically in their local
language at the company's local web page.
- EU Assist For Gaza Cargo .......... as the port is to open a
temporary structure which will allow regional companies to import &
export goods by air next year. While the temporary structure is being built,
Gaza Int'l Airport will be developing a permanent cargo facility in a
project which will cost US$24.5M. In order to speed the process up, the
European Commission has agreed to exceptionally select a project advisor.
Instead of going through the usual method of public tender, the advisor will
be selected through a negotiation process, being chosen from a short list.
- "UPS In The Internet Age" ......... as James Kelly, CEO
of UPS, gives an in depth interview regarding the "enabler" of
commerce. http://www.mercurycenter.com/svtech/news/indepth/docs/qs022800.htm
- Just Mark Your Box "Contains Red Pants" ........... as
FedEx made an unusual entry to its 2nd season as a sponsor of the Ferrari -
Marlboro Formula One team ny taking a "surprise" lap on the track
prior to the 17th January test session. To make a special delivery to Rubens
Barrichello, the new member of the famous team, the FedEx courier obtained
permission to drive on the track to ensure on-time delivery of Barrichello's
red Ferrari overalls - a personal touch that resulted in a satisfied
customer. "A few seconds can make all the difference - whether our
customer works in an office or drives an F1 race car," said FedEx V.P.
David Binks. Our advice, if a few seconds make a difference as to pants, see
your doctor!
- Had He Also Eaten A Twinkie? .............. as a so called bad
reaction to prescription blood pressure medicine may have caused a man to
barge into the cockpit of an Alaska Airlines jet & attack the crew, his
lawyer said. Peter Bradley, 39. Bradley, of Blue Springs, Mo., is charged
with interfering with crew & attendants on a March 16 flight from Puerto
Vallarta, Mexico, to San Francisco. Witnesses said he lunged for the
controls, cursing & shouting "I'm going to kill you," and was
wrestled away by the pilot & subdued by fellow passengers. Bradley, a
carpenter with no criminal record or history of mental health problems,
stood quietly in court while a federal prosecutor argued for his detention
without bail until trial. He could face up to 20 years in prison if
convicted. Defense lawyer Jerrold Ladar told reporters that Bradley has
little recollection of the incident & that tests after the arrest turned
up no signs of illegal drugs or alcohol. He said Bradley may have had a
reaction to prescription drugs he takes for high blood pressure. American,
Alaska, Northwest, Delta & TWA now say they are seeking to modify &
strengthen bi-fold cockpit doors that are standard on certain planes,
including DC-9s & MD-80s.
- JFK Air Cargo Expo 2000 ......... as the event will be held on
March 30 at Holiday Inn, JFK. Speakers include US Customs (AES), Barcodes
(Symbol Tech), Internet transactions (GT-X) and Cargo Systems (Interjet). http://www.jfk-airport.org
- Action Considered On Int'l Coastguard Patrols ......... as high
level representatives from Asian coastguard & maritime security agencies
in 14 different countries met in Singapore on 6 March as part of the build
up to a series of anti-piracy summits in Tokyo over the next 2 months. Japan
is pushing for more cooperation between South East Asian countries in
fighting piracy. Nippon Foundation executive director Hiroshi Terashima
said: "The greater the cooperation among the nations of South East
Asia, the greater the success will be in combating piracy." Japan's
Maritime Safety Agency guard & rescue director-general Masaru Kubota
echoed this sentiment, adding that there was an alarming trend of
"Int'l piracy syndicates that are very well organized & covering a
wide geographical area." Japan is pushing for joint patrols by
coastguard & naval units from Asian countries under the banner of an
IMO-backed Int'l organization as well as measures to tighten up inspection
& enforcement ashore, effectively denying pirates a safe port of call,
and to make search & rescue operations swifter and more effective. The
call for action on ship hijackings & piracy was made by Japanese prime
minister Keizo Obuchi following last year's hijacking of the M/V Alondra
Rainbow and the Singapore meeting took place against the backdrop of the
disappearance of the M/V Global Mars, both Japanese owned & operated
ships.
- Pirate Victims Rescued ........as 17-man crew of the chemical
tanker M/ V Global Mars have been found safe & well 2 weeks after their
ship was hijacked on Feb. 23. They reached the island of Surin off the Thai
coast on March 10 and contacted their manning agent. The ship, carrying
6,000 tons of palm oil from Malaysia to India, was attacked off the Thai
coast by around 20 pirates armed with automatic weapons on the night of
February 24. The crew, 7 from South Korea & 10 from Myanmar, were
blindfolded & moved to a large fishing boat, where they were held until
March 7. The hijackers then put them aboard a smaller fishing vessel with
supplies. They ran out of fuel 2 days later but ran into Thai fishermen who
resupplied them & gave them directions to the coast. All 17 men have
since returned home after giving statements to the Thai authorities. The
Global Mars itself has still not been sighted. The vessel continues missing
& the subject of a US$100,000 reward. See March 6 entry in our
"Cargo Damage Dispatches," below. There is also still no news of
the other missing Japanese-operated bulker M/V Hualien No 1, and it has been
suggested that it may have been boarded by pirates pretending to be Chinese
officials. The ship vanished in the vicinity of the Taiwan Strait over 2
weeks ago, but search operations have found nothing. See The Cargo Letter
Cargo Damage Dispatches, below.
- NCBFAA Rule Victory ............ as under a new rule issued by the
Federal Maritime Commission (FMC), ocean transportation intermediaries
operating as both freight forwarders & NVOCCs will need only one
employee to oversee those functions. Under the old system, such firms were
required to employ 2 persons for such activities. The FMC acted in response
to a request put forth last year by the National Customs Brokers &
Forwarders Association of America. The new rule will reduce regulatory
burdens and provide savings to firms that would have otherwise been required
to change their business structures, the FMC said. The ruling will affect
approximately 600 OTIs with affiliated forwarding & NVO operations, the
FMC said. The rule take effect in mid-April.
- Paying To See The Tariff .......... as the FMC will mail letters to
carriers reminding them of the rules governing accessibility to tariffs on
the Internet, FMC Commissioner Joseph E. Brennan told the NCBFAA Convention
in Arizona this month. Brennan said that some carriers are charging fees as
high as US$1,500 to forwarders & shippers to access carrier Web sites
that publish tariffs. Some carriers seem to be "thumbing their
noses" at FMC rules that say carriers must provide ready access to
rates on the Internet, he said. Mailing letters to carriers reminding them
of the rules instituted by the Ocean Shipping Reform Act is the FMC's first
step. The commission hopes it will not have to "resort to
enforcement," Brennan said. Under OSRA, carriers no longer have to file
tariffs at the FMC. But they must provide public access to tariffs. Brennan
said some of the fees that carriers are charging may be
"unreasonable."
- Busted? ........ as early this month the European Commission raided
the offices of shipping companies Hanjin, Cho Yang, K-Line, Hyundai,
Yangming & DSR-Senator in order to collect documents for an
investigation into price agreements. The Commission suspects that Asian
shipping companies make price agreements for transport between European
& American destinations. It is alleged that these shipping companies
immediately followed an initiative of the Conference Taca for introduction
of a surcharge for repositioning of US$250 per container.
- Needing To Be Busted ............ as 12 U.S. ports' efforts to
combat cargo theft & other crimes received low marks from the
President's Interagency Commission on Crime &Security. Last summer the
commission members visited the ports of Miami, Port Everglades, Gulfport,
New Orleans, Charleston, Los Angeles, Long Beach, Tacoma, Detroit,
Philadelphia, New York/Newark & San Juan. The ports were not rated, but
all were ranked "fair to poor" on security measures. The
commission found that:
- Crime information "has been very difficult to collect."
- "Internal conspiracies" are a major issue at many ports.
- Many ports are ignorant of the threats they face because vulnerability
assessments have not been performed locally.
- Access to seaports and operations within seaports is often
uncontrolled.
The commission also found that a lack of minimum security standards at
ports, terminals, and warehouses leaves many ports and port users vulnerable
to theft, pilferage, and unauthorized access by criminals. Also the
commission f ound that detection equipment, such as large-scale x-rays, is
lacking at many high-risk ports.
- Pafic Seen As Tops ........ as following last year's rate
increases, the booming transpacific container trade is the most profitable
trade lane for shipping lines, a senior executive of P&O Nedlloyd said.
Tim Harris, CEO of P&O Nedlloyd, said that eastbound freight rates in
the Pacific have shown a "NASA-like takeoff," following last
year's US$900 per 40-foot container rate increase. However, with a 3% market
share in the transpacific last year, P&O Nedlloyd said that it did not
benefit from this trade's profitability improvement as much as other
carriers. Read the dismal 1999 results for P&O in our "Financial
News," above in Part 1.
- Proposed Harbor Service Fee Seen Dead .......... as U.S. Sen. Kay
Bailey Hutchison, R-Tex., who chairs the Senate surface transportation &
merchant marine subcommittee, has pronounced President Clinton's proposed
harbor services fee legislation "dead on a rattle." For details of
the proposal see The Cargo Letter [349].
- Port of Singapore Retains Crown ........... as it attracted
shipping tonnage amounting to 877 million gross tons (mgt) last year, up
2.3% from 858 mgt achieved in 1998, & retains the title of world's
busiest port for the 14th year running. The growth in shipping tonnage was
achieved by all major vessel types that called at Singapore. Growth averaged
about 3% for container, tanker and bulk traffic, with container vessels
alone contributing 38%. Singapore's top bunkering port status also received
a boost in 1999 when it set a new record of 18.89 million tons in bunker
sales. The 4.6% increase over the 1998 volume of 18 million tons underscored
the city state's continued attraction as a major bunkering stop. The number
of vessels calling at the Port of Singapore last year rose 0.4% over 1998 to
141,523. In terms of container traffic, the port handled a total of 15.94
million TEU. This was an increase of 5.3% from 15.14 million TEU in 1998.
- Sorry COSCO ........ as it was Hanjin Shipping that has signed a
letter of intent to lease a new 375-acre container terminal on the site of
the former Naval Station & Naval Shipyard in Long Beach. The event
follows an epic series of political maneuvers & lawsuits to block use of
the historic former U.S. Navy Station by China's COSCO Line. Hanjin plans to
move from its current Pier A terminal in Long Beach to the future giant Pier
T terminal and will have a 25-year lease for the facility. When completed,
the Pier T terminal will feature 5,000 feet of wharf, 50-foot water depths,
a dockside rail yard, and 12 to 14 post-Panamax sized cranes capable of
unloading ships too wide for the Panama Canal. The 1st phase of the terminal
will be completed in 2002. Hanjin currently moves more than one million TEUs
a year at its 170-acre terminal on Pier A. Well, considering the great COSCO
battle, which went all the way to the U.S. National Security Counsel, we
must now ask if Hanjin might have spies & hidden Korean troops in it's
'40 footers? If you lived in L.A., you'd want to know what this has all been
about.
- TMM Deal Closes ......... as Transportacion Maritima Mexicana, S.A.
de C.V., the leading Latin American multi-modal transportation &
logistics company, has closed the sale to CP Ships of TMM's 50% equity
participation in Americana Ships. The transaction confers full ownership of
the branded container shipping services operated by TMM Lines to Canadian
Pacific's container shipping subsidiary, CP Ships. Americana Ships will
continue to use TMM Group's intermodal & container logistics services in
Mexico. TMM has received approximately 80% of the proceeds from this
transaction and expects to receive a final payment shortly. The proceeds
from this transaction, together with the proceeds from the asset sales in
1999 amount to approximately US$270M.
- Mexico Is Returned To Spain! ............ as Naviera del Odiel, the
Spanish shipping company, has acquired Compania Trasatlantica Espanola from
the Mexican multimodal group Transportacion Maritima Mexicana (TMM).
Compania Trasatlantica Espanola runs liner services on four routes: from the
Mediterranean to the North & West Coasts of South America. The recent
TMM sale of its 50% share of the Americana Ships joint venture to CP Ships
did not include its Compania Trasatlantica Espanola subsidiary.
- MicroShip? ............ as Bill Gates, the world's richest man, now
owns an 8% share of Newport News Shipbuilding. The purchase, disclosed in
forms filed with the U.S. Securities & Exchange Commission, is worth
US$68.9M at current stock prices and makes Gates one of the shipyard's 2 top
stockholders. MicroShip2000? We're downloading now.
- Hiding The Charge ......... as Hong Kong Shippers' Council has
expressed hopes that terminal handling charges can now be incorporated
within ocean freight rates. Hong Kong still has the highest THC levels in
the world according to the council & it is the shippers who have to
cover these costs. At the moment, charges are around US$367 per FEU.
Currently, for most exports leaving Hong Kong, the buyer pays for the
product while the shipper shoulders the cost of the THC. As a result, the
council has called for shippers to demand all-in contracts in which the THCs
are included.
- Raising The Rate ......... as the Europe West Africa Trade
Agreement carriers will increase southbound rates from northern Europe to
West Africa, effective April 1. Rates will be raised US$390 & US$700 per
1 x 20' & 1 x 40' dry freight containers, respectively. Reefer-box rates
are to be hiked by $580 & US$870 per 20 footer & 40 footer,
respectively. According to the conference, lines on the trade have been
under pressure since the end of 1998, due to an average 40% drop in
southbound freight rates. Established earlier this year - following an 8
year period when no conference operated on the route - Europe West Africa
Trade Agreement is made up of Safmarine, Nile Dutch Africa Line, West-Afrika
Linien, P&O Nedlloyd & Maersk Sea-Land.
- Fleet Squeeze.......... as over 100 Russian ships might become the
property of foreign companies in the near future. At present, these ships
are mortgaged with foreign banks in exchange for credits received by Russian
shipping companies for purposes of renovation of the fleet. This problem was
discussed by the Maritime Council of Primorye which met in session in
Vladivostok. One of reasons why Russian ship owners are facing financial
shortages is exorbitant taxes levied on Russian ships working on
"charter terms" -- a lease agreement with the right of subsequent
redemption. These ships are charged customs duties as foreign ships at every
Russian port of call. The overall fees charged might reach 26% of the total
cost of the ship. Nowadays, the charter agreements are widely used by
shipping companies from all over the world to replenish their fleet by 30%
on average. States interested in fostering their maritime positions fully
relieve their companies of paying indirect taxes, while in Russia, ships
belonging to Far Eastern companies avoid calling at Russian sea ports &
instead, prefer South Korean harbors.
- The Antitrust "Farm" Squeeze .......... as the
Agriculture Ocean Transportation Coalition wants Congress to abolish ocean
carrier antitrust immunity. The coalition, which represents thousands of
small, medium &large U.S. agriculture exporters, supports the passage of
The Free Market Antitrust Immunity Reform Act (H.R. 3138). The legislation
was introduced by Congressman Henry J. Hyde, R-Ill., last year to eliminate
ocean carrier antitrust immunity in the Ocean Shipping Reform Act. Antitrust
immunity allows carriers to collectively discuss and establish prices for
ocean transportation. The AgOTC says this places smaller packers, growers
and processors at a competitive disadvantage when negotiating rates &
services with carriers. However, House Judiciary Committee hearings on
legislation to repeal ocean carriers' antitrust immunity privileges last
week gave no indication that Congress will move quickly on the bill. This
said, a senior official of the European Commission's competition directorate
said this week that the EC has no plans to withdraw the antitrust immunity
of ocean liner conferences. "The Commission is not at present
considering any proposal to modify or abolish the block exemption under EC
competition rules," said Juergen Mensching, head of the transport unit
at the EC's competition directorate.
- Skuld Chief Quits .......... as the Norwegian mutual P&I
insurer's CEO & president Havar Poulsson has quit the club with
immediate effect after 12 years as its head, citing the need for a fresh
approach and a new face in the top job. "The marine insurance industry
is in a difficult position after several years with continuing &
deepening overcapacity," he said in a statement. "The present
state of imbalance in the market requires proactive & strong measures
which need a fresh pair of eyes.
- Hellman Worldwide Logistics Signals Further SOS ........ as it's
"Shipments of Parts" (SOS) service is expanding worldwide. It is
currently available only in Greece, Holland, Italy & Japan. Managed from
Hellmann's Greek office, the service allows spare parts to be sent &
picked up by ships from air freight, express air or express courier at any
time, depending on the customer's needs. Bravo to those who find new ways to
find new service paths in our industry. BRAVO!
- High Tech Stowaway Solution ........... as port operator Modern
Terminals recently became the 1st Hong Kong terminal operator to purchase
CO-2 detectors & give additional support to customers' efforts to
prevent the smuggling of people inside containers. The U.S. made detectors
are portable & user-friendly. By inserting a probe into the gasket of a
container door, terminal staff can obtain carbon dioxide emission readings
from inside the container, thus checking whether there are any people
inside. Shipping lines who wish to maintain the integrity of the shipper
load & count, and avoid breaking the seals of containers, can request a
reading on the CO-2 detector before planning any further action. A probe
inserted into the container can detect CO-2 within a few seconds, although a
5 minute reading is recommended to maximize the effect. If the CO-2
concentration is present & keeps rising, the shipping line will be
immediately informed by e-mail.
- Wood Wars ........... as the U.S. Department of Agriculture's
Animal &Plant Health Inspection Service has issued a strong warning to
U.S. exporters shipping solid wood-packing material to China: Treat it or
risk having your cargo turned away by Chinese authorities. China implemented
new rules on Jan. 1 that require U.S. wood packing to be treated against
pinewood nematode, a pest associated with pine wilt disease. During the
60-day grace period, Chinese authorities would hold cargo that lacked proper
certification until the information was supplied. The last shipments to be
granted that flexibility left U.S. ports on March 1. APHIS created special
forms -- the Certificate of Heat Treatment (Plant Protection &
Quarantine Form 553) -- for U.S. shippers to comply with China's new rules
for heat-treating wood-packed shipments. The shipper should fill out this
form and take it to a local USDA bureau or state cooperator office for
endorsement. The form is available at APHIS's Web site at http://www.aphis.usda.gov/oa/chinaswp/hotbutton
. Heat-treating the wood to 56 degrees Celsius for 30 minutes will destroy
pinewood nematode. The pest may also be eradicated by kiln drying wood
packing. If no wood packing material is present, the shipper should
self-certify the shipment by attaching a signed statement on company
letterhead to the bill of lading, stating "There is no solid wood
packing material in this shipment." Shippers are also encouraged to
attach a copy of the Chinese declaration of no solid-wood packing material
available on the APHIS Web site at http://www.aphis.usda.gov/oa/chinaswp/nowood.html.
Chinese officials developed these statements to assist in cargo clearance.
If there's solid-wood packing in the shipment, but it is not from coniferous
trees, the shipper can self-certify by stating on its bill of lading and/or
invoice: "The solid wood packing material in this shipment is not
coniferous wood."
- ANZDL Books On Line ......... as Australia-New Zealand Direct Line
has launched an online booking service which allows shippers to generate a
live booking by connecting directly to its backroom software. ANZDL said
that it is the 1st carrier to offer such as service. Other ocean carrier
sites only enable shippers to send an e-mail request to their customer
service department, while ANZDL's online service is integrated with its
actual booking module, the carrier said. For shippers making an online
booking, ANZDL sends a booking number & confirmation immediately on the
screen, as well as via a separate e-mail. http://www.myanzdl.com
- E Safety .......... as Internet-based safety system will soon be
providing safety information on merchant ships' movements, after the
European Commission, the U.S. Coast Guard, & the maritime
administrations of the UK, France, Spain & Singapore have signed a
memorandum of understanding. Called Equasis, the information system will
combine private & public data sources on the Internet, to begin around
May. Japan is expected to join later. http://www.equasis.org
- L.A. Surge Continues ......... as the Port handled more import
cargo last month than in any other Feb. in it's history, leading the way to
record-setting total container volume in what is traditionally a slow month
for container traffic between the Christmas & spring shopping seasons.
Al Fierstine, director of business development for the Port, stated,
"We attribute our record import volume last month to the continuing
momentum of a strong U.S. economy and high level of American consumer
spending at the retail level. Export growth is a reflection primarily of
Asia's economic recovery & stabilization." The Port handled 167,830
loaded inbound TEUs last month, representing a 25% increase over the
previous Feb. record, set last year. The Port last month also surpassed its
1999 Feb. record for total container volume, moving 336,925 TEUs for a 27.7%
increase of 73,147 TEUs. The Port now has handled 300,000 TEUs or more for
an unprecedented tenth consecutive month. In exports, the Port handled
76,561 outbound loaded TEUs last month, a 25.4% rise of 15,488 TEUs compared
to Feb. 1999. The Feb. 2000 export total would have ranked 2nd only to Nov.
last year, when Asia began its consistent recovery from a widespread &
lingering economic downturn. In contrast, the Port Authority of New York
& New Jersey handled 2 million containers last year.
- FMC Fines ......... as the Federal Maritime Commission has reached
compromise agreements with 10 ocean transportation intermediaries and
shipping lines, recovering US$732,000 in fines for alleged violations of the
Shipping Act. The companies are the amount of fines are:
- Empresa de Navegacao Alianca of Rio De Janeiro, US$290,000.
- Compania Chilena De Navegacion Interoceanica, a Chilian shipping line,
US$150,000.
- Caribbean General Maritime Ltd., an ocean common carrier, based in St.
Lucia, US$80,000.
- Cargonauts, an ocean transportation intermediary, based in Miami,
US$60,000.
- Maritime Trading Group, a Miami NVOCC, US$42,000.
- Speed Cargo Service, Inc., a Miami-based OTI, US$30,000.
- Miami-based non-vessel-operating common carriers Alexim Trading Corp.,
Interworld Freight Inc., Express Contgainer Line & Total Marine
System, a Miami NVO, paid US$20,000 each.
- Cause of M/V Dashun Loss Told .......... as investigators have
blamed human error & stormy seas for the sinking of ferry M/V Dashun
that killed 280 people in one of China's worst maritime accidents. A special
government panel looking into the Nov. 24 disaster put primary
responsibility for the accident on the crew: They badly packed too many
goods into the ferry. When a fire broke out, the crew pumped too much water
into the cabin, accelerating the ship's sinking. Bad weather in the Bohai
Gulf then hampered efforts to reach the Dashun. The Dashun was on its way
from Yantai to Dalian when the accident occurred. Only 22 of the 302 people
known to be on board survived. Reports of the tragedy crystallized public
fears about lax safety & official indifference. Afterwards, Beijing
promised to improve safety on passenger ships. The panel investigating the
Dashun sinking also blamed the ferry's owner, the Yanda Group, noting that 3
of the company's ships had sunk since 1997.
- Going Home From Hell ........ as U.S. Immigration officials have
ordered the repatriation of 11 Lithuanians sailors who have been stranded
since their freighter was damaged by Hurricane Georges in the fall of 1998.
The M/V Golden Star was towed into Tampa after the hurricane, and the Coast
Guard ordered the ship held until repairs made it seaworthy. Since then, a
succession of foreign crew members have been stranded here, some for more
than a year, unpaid, unable to leave the ship. They lived without heat or
air conditioning, a garden hose their only source of fresh water. "It's
not the fault of the crew,'' said Ron Johnson of the Immigration &
Naturalization Service. "They were told to come here and do a job. They
had no way of knowing what they were getting into. But the ship owners knew
darn well that ship wasn't going anywhere." The INS ordered the sailors
to be returned home, but if the deadline isn't met, the INS said it would
deport the crew members and send the bill to the ship owners. The men were
to collect back pay ranging, in some cases up to US$9,000, from the ship
owner, listed in documents as Tamboril Properties Inc.
- Giant Visitor .......... as P&O Nedlloyd's M/V Tasman, at 5,468
TEU container capacity, was the largest container vessel ever to have
berthed at the port of Shanghai when she arrived earlier this month. She is
the 1st of 5 new Explorer-class ships entering service this year, all of
which will be deployed on the Shanghai-Europe service.
- Giant Menace .......... as an iceberg about twice the size of
Delaware broke off from the Ross Ice Shelf in Antarctica on 23 March &
could drift into shipping lanes around the South Polar region. The elongated
iceberg, detected by satellites, measures 183 miles by 22 miles & is
among the largest ever observed, according to the National Science
Foundation, which coordinates American research at the South Pole.
Scientists estimated that the iceberg surface area is about 4,247 square
miles. Delaware is 1,932 square miles. "This is a very big iceberg,
close to a record if not a new record," said Matthew Lazzara, a
scientist at the University of Wisconsin-Madison Antarctica Meteorological
Research Center, which is supported by the NSF. An announcement said the
iceberg formed from glacial ice moving off the Antarctic continent and into
the sea. It broke off along cracks that formed in the Ross Ice Shelf.
Although Antarctica is very cold, the continent receives only about an inch
of precipitation a year. Based on this, scientists said it will take up to a
century to replace the ice lost to the new iceberg. Calving of the iceberg
moved the boundary of the Ross Ice Shelf southward about 25 miles.
- S/V Amistad To Sail Again ......... as more than 160 years after
the slave ship S/V Amistad was commandeered by its 53 African captives, a
replica of the schooner is ready to tour the world spreading the story. The
129-foot schooner was launched into the Mystic River last week before
American & Sierra Leone dignitaries & descendants of the Amistad
captives, whose story was told in a 1997 Steven Spielberg movie. The ship
was christened with water from Cuba, Long Island, NY, and Sierra Leone, all
locales where the Amistad sailed. The 2 year, $3.1 million reconstruction -
aided by a US$2.5M state bond - took place at the Mystic Seaport, a replica
of a 19th century New England seaport. The slaves took control of the
original Amistad near Cuba in 1839 and tried to force the two Spaniards who
had bought them in a Havana slave market to sail them back to Africa. The
ship wandered up the East Coast before landing on Long Island. The slaves
were jailed and several trials followed. An 1841 U.S. Supreme Court ruling
freed the slaves, whose cause had been taken up by white abolitionists &
former President John Quincy Adams. The 35 Africans who survived returned to
their homeland in 1842. The replica will begin sea trials June 1 and make
its maiden voyage to New York City on July 2. Voyages abroad are being
planned. http://www.amistadamerica.org/main/welcome.html
- Collapse Near ........ as danger lurks in the deep waters of the
ancient Zanzibar Harbor, once the hub of one of the world's great trading
ports. Concrete beams supporting its only quay are corroding so quickly they
will probably collapse before the end of the year, less than 10 years after
they were erected, according to port officials & analysts. "Work
began in 1989 but as soon as it was finished, around three years later,
corrosion started and the rate was so high, it was alarming," says the
port director. "It turned out the materials used were not up to
standard," he said. The Zanzibar government went back to its financier,
the European Union, to get funding for repairs. But by the time the approval
came, the same government was embroiled in a row with its donors over
democracy & human rights abuses on the islands of the Zanzibar
archipelago. The government of incumbent President Salmin Amour narrowly
defeated the opposition in the 1995 general elections, but the opposition
rejected the result. In protest, foreign donors led by the European Union
withdrew development aid to the islands, leaving the repairs pending.
- Submarine Centennial History Event of The Month ........ as on
March 17, 1959 USS Skate (SSN 578), the Navy's 1st production nuclear
submarine, surfaced through a thin layer of Arctic ice at the North Pole.
Skate was the 1st submarine to surface at the top of the world. The sub
ended up surfacing 10 times through the ice during this mission. Skate was
the 3rd nuclear submarine with 3 others in its class: USS Swordfish (SSN
579), USS Sargo (SSN 583) & USS Seadragon (SSN 584). For more
information on the Submarine Centennial, go to http://www.chinfo.navy.mil/navpalib/ships/submarines/sub100.html
- This Month In U.S. Naval History ........ as on March 20, 1922, a
former collier (coal carrier) was recommissioned after conversion to a
"flat-top." USS Langley (CV-1), became the Navy's 1 and world's
1st aircraft carrier.
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.
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.
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
- Watching Flotsam From Our Errors
- What Becomes of Our Lost Cargo
-- 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
-- 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
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