The Cargo Letter

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THE CARGO LETTER [352]
Air & Ocean Freight Forwarder - Customs Broker News
25 May 2000

Good Thursday 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."

To help you find what you need -- FAST -- there's now a transport search engine installed at our www.CargoLaw.com website!

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 "A" Section: Trade, Financial & Inland News
   1.  Freight Forwarder Trade Briefs
   2. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
   3. Freight Forwarder World Air Briefs
OUR "C" Section:  FF World Ocean News
   4. FF World Ocean Briefs
   5. The Cargo Letter Cargo Damage Dispatches
      * Back By Popular Demand
OUR "D" Section: FF in Cyberspace
   6. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
   7. New U.S. Transport Related Legal Cases 

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


1. Freight Forwarder Trade Briefs

2. The Cargo Letter Financial Page


OUR "B" Section: FF World Air News


3. Freight Forwarder World Air Briefs


OUR "C" Section: FF World Ocean News


4. FF World Ocean Briefs

5. The Cargo Letter Cargo Damage Dispatches

Visit our new Vessel Casualties & Pirate Activity Database ......... where daily updates of this news are posted. Stay up to date!

This is only a partial list of casualties for the month in that most dangerous place ....... out there.

Panamanian M/V BAO JI SHAN (3,957 tons gross, built 1984) grounded on reef outside Port Moresby harbor on May 21. Refloating attempt to be made with assistance of local tug. (Mon. May 22 2000)

The Maltese-flagged bulk carrier M/V Evelyn sank off Aden on today after catching fire earlier, Lloyds Shipping Intelligence Service said. The crew had already been evacuated from the 22,546 dwt vessel by rescue vessels & taken on board a chemical tanker. The Evelyn had been sailing from Novorossiysk, Russia, for Malaysia, carrying fertilizers. Its position was 12 59 N, 47 58 E, in the Gulf of Aden. (Sat. May 20 2000)

A pier holding a new open-air bar collapsed & plunged into the Delaware River at the Port of Philadelphia tonight, killing at least 3 people & injuring more than 24, with 7 missing. At least 30 people were on the pier when it dropped into the water about 8:25 p.m. A canvas tent over the pier also collapsed, covering many people who fell into the water. The pier held the new bar, "Heat", which is attached to a ballroom dancing area at the four masted S/V Moshulu restaurant or Eve McCarney, a converted vessel docked on the river. "Heat" opened this month. (Thurs. May 18 2000)

F/V HANNOVER (2,172 gt, built 1994) had a fire on board, approximately 280 nautical miles southwest of Iceland, May 14. The vessel, which may still be on fire, was towed into Reykjavik May 17, where firefighters are due to board her. (Thurs. May 18 2000)

The Russian M/V SKRIPLEV, 416 gt, built 1963, sank at 0615, May 15, in Valentine Bay, 3.7 miles off the coast, in lat 43 03N, long 134 20E. All 14 crew members were rescued & proceeding to Slavyanka, Russia. (Wed. May 17 2000)

On 14.05.2000 at 0205 LT in position 03:54.1N 098:46.0E at Belawan anchorage, Indonesia, 5 pirates armed with long knives boarded a general cargo vessel from starboard side. They tied up duty sailor & threatened to kill him. They broke into forecastle store & stole a large amount of ship's stores. Pirates jumped overboard & escaped at 0225 LT after realizing that the other crew had been alerted. At 0320 LT the same pirates re-boarded the vessel. However, seeing the alert crew they aborted the attack & escaped in a small unlit wooden boat. (Tues. May 16 2000)

On 10.05.2000 at 1230 LT at Chennai anchorage, India, 1 pirate boarded a bulk carrier from stern. He was noticed by the duty officer but he jumped overboard and fled in a waiting craft with 6 other people in it. Ship's stores were stolen. (Tues. May 16 2000)

On 10.05.2000 at 2350 LT at Chittagong anchorage, Bangladesh, 4 armed pirates boarded a general cargo vessel. They stole ship's stores & escaped by jumping into the water. (Tues. May 16 2000)

Five stranded travelers, including famed pilot Dick Rutan, were rescued from the North Pole about 12 hours after their Russian-designed biplane landed and then sank through the ice, the Coast Guard said on May 16. The group boarded a commercial plane late May 15 for Eureka, Nunavut, Canada, a small settlement in the Queen Elizabeth Islands west of Greenland. Another plane hired by their families was going to transport them back to Alaska. The travelers had been stranded about a mile from the North Pole on the North American side. Among the group was Rutan of Mojave, Calif., who became famous in 1986 as one of the 2 person crew who made the 1st flight around the world without stopping or refueling. The 5 aboard the An-2 biplane were traveling with a single-engine (Mon. May 15 2000)

The Bahamas M/V MULTIFLEX SPRINT (2,854 gross), Valletta for Aviles in ballast, sustained engine-room damage & arrived Corunna, in tow of tug Remolcagure Bat, May 10. Repairs under way May 12. (Sat. May 13 2000)

Three dead stowaways & 4 survivors were found inside a steel cargo container at Miami aboard M/V Seaboard Caribe, exposed to the hot sun from the Dominican Republic. Temperatures inside the containers, which can't be opened from the interior, can reach 125 to 130 degrees F. "It appears that they baked inside one of the containers," said a spokeswoman for the U.S. INS. The Capt. of Seaboard Caribe had notified authorities of the stowaways. The ship, operated by Seaboard Marine, left Puerto Plata on Monday. The 4 survivors will likely be repatriated. One was taken to a hospital after complaining of dizziness & vomiting. Smugglers often use shipping containers to bring illegal immigrants into the U.S. In January, authorities in Seattle found 3 Chinese men dead in a cargo container along with 15 other men trying to reach the U.S. The men, who had become seasick, died of acute malnutrition & dehydration. (Thus. May 11 2000)

The Danish ro-ro M/V DANA MAXIMA (17,068 gross), Esbjerg for Immingham, was in collision with the Danish trawler F/V SOLVEIG HOLM (495 gross) at the entrance to Esbjerg May 6. Dana Maxima sustained hole above waterline. Solveig Holm sustained bulwark damage. (Wed. May 10 2000)

The Syrian M/V DALIA S. (804 gross), Tartous for Alexandria with concentrated nitric acid, had an acid tank fall over, contents eroded hull bottom & vessel sank about 6 km off Alexandria May 6. All crew rescued. Over 160 tons acid spilled into sea. Clean up under way May 8. Prosecutors are questioning officials in nearby ports. (Tues. May 9 2000)

The Hong Kong bulk carrier M/V APTMARINER (17,677 gross), Ventspils for Montreal, struck an obstruction in fog near the entrance to the Neebish Rock Cut, St. Mary's River, May 5. Refloated same day. Sustained water ingress. Still anchored nearby May 6. (Mon. May 8 2000)

The German refrigerated M/V ACONCAGUA (9,074 gross), Puerto Bolivar (Ecuador) for Gdansk with bananas, grounded on sand in lat 55 52.4N, long 10 51.5E, May 5. No pollution. Vessel attempting to refloat by own means. (Sat. May 6 2000)

The Cambodian M/V Conan carrying steel sank after colliding with a Panamanian M/V Robin Forest, in ballast, in the lower reaches of the Yangtze River. No injuries or casualties reported. The Conan bound for the eastern Chinese city of Nanjing from Mokpo of South Korea, with 10,000 tons of rolled steel, collided with the Robin Forest, at 1035 GMT on Wednesday in the waters of Nantong, between Nanjing & Shanghai. The captain of the Conan ordered his crew to abandon ship that night & by early Thurs. morning the deck was almost fully submerged. China has sent its largest water rescue crane to salvage the ship. (Fri. May 5 2000)

The United Kingdom passenger vessel M/V AURORA (76,152 gross), Southampton for the Mediterranean with passengers, had propeller shaft problems May 2 & returned to Southampton May 3. To be dry-docked for inspection and repairs. (Thurs. May 4 2000)

Two ferries caught in a storm sank in the Meghna River in eastern Bangladesh, killing 46 people &leaving 150 missing. Police divers recovered 30 bodies from the M/V Dolphin after it capsized May 3 with over 150 people aboard some 50 miles east of Dhaka, the Bangladesh capital. An additional 125 people on board were missing and feared drowned. In neighboring Narsingdi district, at least 20 passengers swam ashore as their ferry, M/V Bengal Bird, began sinking with 61 people on May 2. Rescuers found 16 bodies from a nearby shoal. They resumed the search Wednesday for 25 missing passengers. Efforts also were being made to salvage the 2 sunken vessels. (Wed. May 3 2000)

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


OUR "D" Section: FF in Cyberspace


6. The Cargo Letter "Cyber Ports Of Call"

Maritime Events Quarterly

Maritime Training Resources

Maersk-Rail Van ..........information for shippers about their shipments with this enhanced web site. Maersk-Rail Van was formed in Jan. through a joint venture between Rail Van, a privately held, 3rd-party logistics provider based in suburban Columbus, Ohio, & Maersk Inc.

Sea Change in Liner Shipping: Regulation & Managerial Decision-Making in a Global Industry .......... new book from Oxford: Pergamon Press.

ShipDesk ......... new chartering market start up.

14th Ship Production Symposium ......... in historic Colonial Williamsburg, site of previous successful symposia, from August 23-25, 2000. A full technical program of papers, panels, workshops, &industrial visits as well as the Expo, featuring U.S. shipyards, marine manufacturers & vendors The theme for the Symposium is: "Advancing U.S. Shipbuilding in the New Millennium."

Forklift Operator Training Courses for Forklift Certification ........... Forklift Courses said to meet the Federal OSHA Standard 29CFR1910.178

Tradiant ....... E-Commerce solutions for carriers & forwarders has now signed Wan Hai Lines. The company has introduced ForwarderPlus, which the company said will allow forwarders to streamline their process of arranging transportation services. ForwarderPlus allows forwarders to secure confidential contracts & quotes from the 30 vessel-owning carriers participating in Tradiant's Web-based OpenOcean marketplace. ForwarderPlus offers a portfolio of sailing schedules, transit times, currency tables & other information. The system also includes a directory of forwarders, including their service features.

TransitGroup .......... the new site will link agents, trucking companies, and shippers to create a virtual marketplace for trucking logistics, addressing the problems of poor communications & a lack of load visibility that presently characterizes the highly fragmented trucking industry.

Rail News Direct .......... a monthly electronic newsletter featuring the latest rail industry news & happenings. We liked the amount of space given over to Eastern Europe and the banking/infrastructure issues.

The Elian Movie ........ just for fun


OUR "E" Section: The Forwarder/Broker World


7. New U.S. Transport Related Legal Cases

American Airlines vs. Cruz
U.S. Supreme Court
Case No. 99-1565
April 2000

The Warsaw Convention Strictly Construed -- Always

This month the U.S. Supreme Court has let stand a ruling that could force airlines to pay a lot more to some passengers whose luggage was lost or damaged. The court, without comment, rejected an appeal in which American Airlines sought to limit how much it may have to pay for 5 suitcases that disappeared, or arrived empty, during a family's 1995 trip from Washington, D.C. to the Dominican Republic.

The nation's major air carriers told the justices that a federal appeals court ruling in the American Airlines case "will senselessly harm the airlines and raise the cost of air travel for their passengers." At issue was a now-amended provision of the Warsaw Convention that generally limits air carrier liability for lost or damaged luggage to US$9.07 per pound, or US$20 per kilo. The English-language translation of that provision listed various information to be contained on luggage receipts given to passengers. That information includes the weight of each package checked with the airlines. Article 8 of the original Warsaw Convention states that a carrier's failure to provide for two other pieces of information "and" the piece of luggage's weight on the receipt disqualifies that carrier from liability limits.

The required listing of luggage weight on passenger receipts was dropped last year under Montreal Protocol 4, but not retroactively to 1995.

Fourteen members of the Cruz family from Silver Spring, Md., checked 28 bags with American at Washington's Reagan National Airport as they began a trip. Four of the bags never arrived at the airport in Santo Domingo, and a 5th eventually arrived damaged & empty. American initially refused to pay any compensation, and the Cruz family sued for US$15,000 _ the claimed value of the bags & contents. A federal trial judge ruled that the US$9.07-per-pound limit applied even though American had failed to record any weight for the lost luggage on the passengers' receipts. American's policy is to assume that any lost piece of luggage weighed the allowable free maximum, usually 70 pounds.

The judge said the treaty's language meant that the liability limit applied if any of the 3 required pieces of information were listed on a passenger's receipt. Listing all 3 pieces of information was not required, the judge reasoned. The U.S. Circuit Court of Appeals for the District of Columbia reversed that ruling last October, and sent the Cruz family's case back to the judge to reconsider what compensation should be paid. "Although we recognize that the district court's interpretation is linguistically possible, we do not think it is a reasonable construction" of the treaty's language, the appeals court ruled. "The convention obliges a carrier to comply with each of the 3 particulars."

American's Supreme Court appeal was supported in a friend-of-the-court brief submitted by the Air Transport Assn. of America, which represents all major domestic airlines & 5 foreign airlines. The association told the court that, although 99.5% of all checked bags reach their intended destination without incident, more than 450,000 pieces of baggage are delayed, lost or stolen each year.

Because the so called "disputed" treaty language was changed by Montreal Protocol 4 in March 1999 and owners of lost or damaged luggage have 2 years to make a claim, the association said, "There is a risk that similar suits against other airlines, including foreign carriers, may be filed in districts across the country until March of 2001." This said, The Cargo Letter has often reminded that as a treaty, the Warsaw Convention must be strictly applied. Carriers & airforwarders must take care to remember that the liberal terms of Montreal Protocol 4 apply to flights only after March 1999 and only where both the origin & destination countries have adopted the new protocol. For a full review of the new rules, please study our full analysis & suite of training tutorials on the Internet.

In re Air Crash Off Long Island, New York, on July 17, 1996
2000 U.S. App. LEXIS 5637
2nd Circuit Court of Appeal
March 29, 2000

TWA 800 Crash Did Not Occur on "High Seas"

The Court held that TWA Flight 800 crashed into the Atlantic Ocean 8 miles offshore New York, in U.S. territorial waters, not waters of "the high seas," and thus the Death on the High Seas Act, 46 U.S.C. App. 761-767 (DOHSA) did not apply, along with its prohibition on the recovery of nonpecuniary damages (such as those for pre-death pain and suffering & loss of consortium). DOHSA's limitation to the recovery of pecuniary damages is contained in 2 of the Act, which limits recovery to "a fair & just compensation for the pecuniary loss sustained by the persons for whose benefit the suit is brought." 46 U.S.C. App. 762. The issue had been certified by the trial court for interlocutory appeal pursuant to 28 U.S.C. 1292(b). TWA Flight 800 departed from JFK Int'l Airport in New York on July 17, 1996, for Paris & Rome. Shortly after takeoff, the plane exploded in midair & crashed. According to the National Transportation Safety Board, the crash occurred approximately 8 nautical miles south of the shore of Long Island, New York. All 230 persons on board were killed.

The trial court, in denying the defendants' motion to dismiss, had rules that DOHSA applies only where death occurred on both the high seas and beyond a marine league (3 nautical miles) from shore. Section 1 of DOHSA (46 U.S.C. App. 761) provides for a right of action: "Whenever the death of a person shall be caused by wrongful act, neglect, or default occurring on the high seas beyond a marine league from the shore of any State, or the District of Columbia, or the Territories or dependencies of the U.S...." The parties agreed that the crash occurred 8 nautical miles off the coast of Long Island, which is "beyond a marine league from the shore of any State." However, the parties disagreed on the meaning of "high seas."

The plaintiffs argued that "high seas" refers to those waters beyond the territorial waters of the U.S. Under Presidential Proclamation No. 5928, issued in 1988 by President Reagan, the territorial waters of the U.S. extend 12 miles from the shore of the U.S. As the crash occurred 8 miles offshore Long Island, the plaintiffs claimed it occurred in U.S. territorial waters, rather than on the high seas, and thus that DOHSA did not apply.

The defendants contended that the term "high seas" means all waters beyond the low-water mark. The defendants argued that because the crash occurred both beyond the low-water mark and more than a marine league from the shore of Long Island, DOHSA applied.

This said, since this decision was handed down, Congress retroactively amended DOHSA to exclude from its scope commercial aviation crashes occurring on or after July 16, 1996. See H.R. 1000, 106th Cong. 404 (2000).

Garris v. Norfolk Shipbuilding & Drydock Corp.
2000 U.S. App. LEXIS 6160
U.S. 4th Circuit Court of Appeal
April 3, 2000

Recognizes General Maritime Action For Worker Killed in State Territorial Waters

Christopher Garris was killed while working as a sandblaster aboard the vessel USNS MAJ. STEPHEN W. PLESS, a ship berthed in the navigable waters of the U.S. The sole issue on appeal was whether the Court should construe or extend the U.S. Supreme Court's decision in Moragne v. States Marine Lines, Inc., 90 S.Ct. 1772 (1970), which recognized a general maritime law cause of action for wrongful death based upon unseaworthiness, to include a general maritime law cause of action for wrongful death based upon negligence.

The 4th Circuit agreed with the trial court that the Supreme Court did not create a general maritime law cause of action for wrongful death based upon negligence in Moragne. The appellate court, in reversing the trial court, however, applied the principles of Moragne and its progeny to recognize one.

Garris was employed by Tidewater Temps but worked on behalf of Mid-Atlantic Coastings (MidAtlantic), a subcontractor of Norfolk Shipbuilding & Drydock Corporation (Norfolk). E.T. Gresham, Inc. (Gresham), another subcontractor for Norfolk, had employees aboard the same ship. On April 8, 1997, a crane operator working for Gresham accidentally caused Garris to fall off a reserve hopper on the ship, which was used to load sand for sandblasting. Garris died as a result of the accident.

After receiving statutory death benefits under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C.A. 901-950 (West 1986 & Supp. 1999)("LHWCA"), Garris's mother, Celestine Garris, brought suit in Virginia federal court seeking recovery for wrongful death based upon negligence under general maritime law and the Virginia wrongful death statute. The district court dismissed her suit on the ground that general maritime law does not recognize a negligence-based cause of action. The district court dismissed with prejudice Garris's general maritime law wrongful death claim. The district court dismissed without prejudice her state law claim under the Virginia wrongful death statute. Garris did not appeal the district court's dismissal of her state law claim. She later filed that claim in state court.

The Court held that the language of Moragne v. States Marine Lines, Inc., 90 S.Ct. 1772 (1970), combined with its historical & legal context and the absence of persuasive authority to the contrary, caused it to conclude that the Moragne case recognized only a general maritime law cause of action for wrongful death based upon unseaworthiness and not for wrongful death based upon negligence. However, the Court continued, "because Congress has not affirmatively precluded a negligence-based cause of action, and because such a cause of action is consistent with the principle of uniformity expressed in Moragne & Miles v. Apex Marine Corp., 111 S.Ct. 317 (1990) ("Today we restore a uniform rule applicable to all actions for the wrongful death of a seaman, whether under DOHSA, the Jones Act, or general maritime law."), we find it appropriate to recognize a general maritime law cause of action for wrongful death based upon negligence. Accordingly, we reverse the district court's dismissal of Garris's general maritime law negligence based claim & remand for further proceedings."

Coca-Cola Vs. Pardhan
Supreme Court of Canada
May 2000

Canada Supreme Court Goes "Gray"

Mushi Pardhan had a can't-miss business plan -- buy Coca-Cola wholesale in Canada & ship it to the Far East, where it sells retail for much higher prices. Coca-Cola took exception to the small Canadian exporter, & the ensuing legal battle reached Canada's Supreme Court before Pardhan won an improbable victory on May 10 over one of the world's most powerful corporations. The David vs. Goliath case underscores the thorny global issues that also are confronting courts in the U.S. & Europe -- a clash between established business practices & a growing entrepreneurial spirit exploiting tighter economic ties between nations. For Pardhan, an immigrant from Tanzania, exporting Coke was good business, with annual sales reaching US$4.8M. He bought more than 50,000 cases of Coca-Cola a week, then shipped them to Hong Kong and Japan. He paid about US$4.25 a case along with a transport charge of US$1 each, then sold it for more than US$6 a case. Nice deal.

But in 1995, Coca-Cola sued, claiming Pardhan's practices violated its trademark protection and won a court order to shut down the business. A federal judge in Canada eventually ruled in favor of Pardhan, saying that he had bought and sold the product legally, and an appeals court agreed. The Supreme Court on May 10 refused to hear the final Coca-Cola appeal. Atlanta-based Coca-Cola said it's worried about unsupervised shipping & handling hurting the quality of its product, whose sales reached US$20B last year. But the court victory was just the latest against companies worried about entrepreneurs exploiting lowered trade barriers among nations. Courts in North America generally have supported so-called gray marketeers -- traders who operate outside the official distribution network of vendors. Those traders make money off the price differences in different markets. Major brands also realize significant profits off the price differences, the only defense they have is to keep harassing these traders through the courts. Gray marketing is a growing occurrence in the 11 European Union countries preparing for full conversion to the euro currency next year. Consumers will quickly spot so-called "profit havens" where the same product sells for less & take advantage, forcing efficiency on the marketplace. For Pardhan, who moved with his family to Canada in 1985, the case was about more than profits. When the legal tussle began, Coca-Cola lawyers armed with civil search warrants arrived at his Markham, Ontario, home to seize business documents. As the case dragged on, Pardhan said he considered giving up but was inspired by his mother to keep battling. The devout Muslim family prayed for success.

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

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