The Cargo Letter

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Air & Ocean Freight Forwarder - Customs Broker News
31 July 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 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 Top Story
   1. Circle Int'l Group In Historic EGL Merger
      * Mouse Buys Elephant?
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 Top Story

1. Circle Int'l Group In Historic EGL Merger

The San Francisco-based forwarder & logistics provider Circle International Group, and EGL Inc., the Dallas-based forwarder formerly known as Eagle USA Airfreight, will merge to form a US$1.4B global logistics company. Circle will become a wholly owned subsidiary of EGL. The merger combines EGL's very strong domestic U.S. air & ground forwarding network with Circle's Int'l forwarding experience & customer base. It positions EGL to compete against the world's largest 3rd party logistics companies for multinational shipping accounts. The all-stock deal, in which Circle shareholders will receive one share of EGL for each Circle share, is valued at US$543M, based on EGL's closing stock price of US$30.75 on June 30. Following the merger, EGL shareholders will own 63% of the merged company & Circle shareholders will own 37%.

EGL & Circle expect to close the deal this fall following regulatory and shareholder approvals. The combined company will have a market capitalization of about US$1.5B & is targeting a 20% annual earnings growth rate. EGL, which will change to a calendar-year fiscal cycle, expects the merger to add immediately to its bottom line & cash flow.

James R. Crane, CEO & majority owner of EGL, will continue as head of the new combined EGL. Peter Gilbert, Circle's chair & CEO, will join EGL's board of directors. "This merger would enhance EGL's already solid market position domestically & would present tremendous opportunities for international growth," Crane said. "We have identified a number of compelling opportunities as we seek to maximize shareholder value through this merger," he said. "Upon closing, we will immediately begin leveraging the economies of scale, benefiting from both the operating synergies & cross-selling opportunities present within our combined base of over 10,000 customers."

Circle controls some 300 logistics centers in more than 100 countries with 4,900 employees. The company earned US$23.2M last year on US$814.1M in revenue. The Circle story began over 100 years ago, in 1898, with the founding of FFG Harper Company as a San Francisco customs broker, helping turn-of-the-century importers bring their goods into California.

EGL operates 92 terminals in nine countries with 3,400 employees. Most of its facilities are in North America. The company earned US$30.7M in 1999 on sales of US$637.6M.

Both companies stock was about the same price, but EGL dropped to a 29 PE ratio while Circle jumped to 21. EGL stock was as much as 60% higher in the past year. Only CEO Peter Gilbert of Circle will have a seat on the new board, even though his company is 35% of the company stock.

According to a confidential source close to Circle, this merger represents "interesting synergy." He continued, "EGL lacks the Int'l presence, as well as the ocean & brokerage capabilities that Circle brings to the mix. EGL has loads of air freight, which Circle also does. Clearly, management wise EGL wins, and probably also on the air side, but I think Circle's ocean & brokerage staff should fare well. The Corporate HQ will likely move to/stay in Houston."

After 102 years for Circle International -- what next? We wish the company well in this new venture.

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

Visit our huge 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. Full details are online!

The 3,797-ton passenger-cargo vessel M/V Trans Asia 1 inter-island ship caught fire but all 520 passengers aboard were safe. The vessel was on its way from southern Cagayan de Oro City to Cebu City in central Philippines on July 29 night when fire broke out in its engine room. A spokesman for the shipowners, Trans Asia Shipping, said all passengers were unhurt & had been transferred to a sister vessel to be brought to Cebu. The distressed ship was towed back to port in Cagayan de Oro. (Sun. July 30 2000)

On 22. July 2000 at 0050 LT at position 13 06N 080 20E, Chennai Anchorage, India, pirates boarded a tanker from forecastle. He tried to steal ship's stores. Duty crew noticed him & alarm was raised. The pirate jumped over board & escaped in a waiting motor boat taking with him 2 fire hoses. (Fri July 28 2000)

On 20. July 2000 at 2245 LT at position 01 50.2N 102 22.5E, Malacca Straits, 6 pirates armed with long knives boarded an LPG vessel. They tied up the crew & threatened to kill them if they did not cooperate. The pirates stole ship's cash about US$10,000 & other valuables from the crew. (Fri July 28 2000)

On 22 July 2000 at 2200 LT at Mid Channel, Malacca Straits, 6 pirates in a fast craft, white color, silent engine, approached a bulk carrier from port quarter & tried to board using a bamboo hook. Attack was aborted due to the presence of the crew on deck. (Fri July 28 2000)

A massive hydraulic door crushed a crewman to death aboard cruise ship M/V Norwegian Sky near Alaska early July 26 morning. The death of Jai Ming Dai, 49, of Shanghai, China, being investigated by the Coast Guard & the Alaska State Police. Accident occurred in interior work area of the ship closed to passengers. About 2,000 passengers & 750 crew members were aboard approaching Haines, north of Juneau. The large hydraulic, watertight doors seal off sections of the ship in the event of fire or flooding, & are designed to close slowly to prevent people from being caught in them. (Thurs July 27 2000)

The bulk carrier M/V ELEVIT (16,683 gt, built 1977) grounded at Helen Mar Reef, Indonesia, on Jul 24. Refloated the next day & shifted to a safe anchorage, where patching work is now in progress. (Thurs July 27 2000)

A Viking crew which planned to mark the 1,000th anniversary of Leifur Eiriksson's voyage to the New World have abandoned ship in the Shetlands after engine trouble. Like many a Viking longboat before, the Skidbladner seemed doomed from the start of its journey on Sweden's west coast in early June. Swedish authorities first delayed issuing a seaworthiness certificate on safety grounds, & then the Skidbladner's engine stopped in the Shetland Isles. The skipper went off to get it repaired and we didn't hear a thing. After a week of waiting the crew abandoned the Skidbladner, deciding they could not reach L'Anse aux Meadows in Newfoundland in time for celebrations to mark Eiriksson's arrival 1,000 years ago. The Islendingur, another Viking vessel skippered by a descendant of Eiriksson, has arrived from Iceland via Greenland. (Wed. July 26 2000)

M/V MEHMET SADIK (493 gt, built 1975) loaded with sand, sank as she waited anchored at Gelibolu port July 24. The reason for her sinking is so far unknown. All 7 crew managed to jump off the vessel. (Tues July 25 2000)

Indian bulk carrier M/V LOK PRAGATI (16,040 gt, built 1984), which left Port Elizabeth for Quebec on Jul 19 with cargo of manganese ore, sent distress signal on Jul 21 after reporting forecastle damage & water ingress. Tug John Ross began proceeding to casualty but returned after master advised on Jul 22 that pumps on board were coping with water in hull and that the vessel's position at that time was lat 34 26S, long 23 41E, bound Cape Town. (Sun July 23 2000)

Somali pirates have hijacked French-registered cargo M/V Net Express in the Gulf of Aden off the northeastern coast of Somalia. More than 15 gunmen in 3 speedboats boarded the vessel July 13 in full view of the village of Bargal, 19 miles east of the port of Bossaso, the witnesses said over VHF radio. The ship had apparently been having engine problems because it had been moored in front of the village for 2 days before the attack. (Sun July 23 2000)

On 19. July 2000 at 2350 UTC at Dar-es-Salaam Anchorage, Tanzania, 5 pirates armed with knives boarded a tanker via anchor chain. They came aboard in an eight meter long, unlit motor boat, manned by 3 accomplices. Duty crew raised the alarm but the pirates broke the store & stole ship's stores. (Sun July 23 2000)

The Belize tanker M/T SUMMER STAR (1,271 gross). Kaohsiung for Zhanjiang with diesel, had explosion & fire in No. 5 hold in Taiwan Strait, in lat 21 57N, long 117 16E, Jul 20. Fire extinguished same day. 2 crew dead. 2 injured. 1 missing. Towage negotiations under way Jul 21. (Fri July 21 2000)

CARGO ALERT: The Panamanian container vessel M/V PRIME VALUE (5,938 gross), Singapore for Calcutta, grounded on sand bank in bad weather at Lower Casper, near Sand Heads, Calcutta, Jul 19. Refloated, grounded again, took water, listed & sank. 7 crew rescued. 15 missing. Unconfirmed reports say 15 missing later found safe. No word on number of containers aboard. (Fri July 21 2000)

The Indian M/V SULTENG I (2,641 gross), Christmas Island for Indonesia with phosphate, took water in No.1 hold & sank off Christmas Island in about lat 09 17.5S, long 105 20.5E, Jul 18. 23 crew rescued. One missing. (Thurs July 20 2000)

On July 16 at 0100 LT in position: 13:04N - 080:22E at Chennai Anchorage, India, pirates from a motorboat boarded a bulk carrier using a line with a hook attached. They tried to steal ship's stores. The duty watchmen spotted them & raised the alarm. Pirates jumped overboard & escaped in their motorboat. (July 19 2000)

The Panamanian passenger vessel M/V PARADISE (70,390 gross) had problems with 1 engine at Miami Jul 17. Cruise terminated. Vessel requires dry-dock repairs. (Wed. July 19 2000)

The Panamanian passenger vessel M/V FUNCHAL (9,563 gross) had electrical fault in control panel while berthing at Gibraltar Jul 16. Assisted to berth by tug. Repairs under way Jul 17. Cruise terminated. (Tues. July 18 2000)

Sri Lanka's army & navy attacked Tamil Tiger rebel bases & bombed a supply ship, killing at least 18 guerrillas. The infantry attacked rebel positions July 16 at 4 places in northern Sri Lanka, where most of the island nation's 17-year-old Tamil separatist war is being fought. 14 rebels were killed & 3 soldiers were wounded. In a separate assault, navy gunboats fired at & destroyed a ship July 16 that was loaded with gasoline for the rebels. The navy captured the ship's crew. (Tues. July 18 2000)

The Spanish ro-ro ferries M/V CIUDAD DE CEUTA (2,753 gross), Algeciras for Tangier with passengers & vehicles, and M/V CIUDAD DE TANGER (9,481 gross), Tangier for Algeciras with passengers & vehicles, were in collision in thick fog in the Strait of Gibraltar Jul 16. 18 persons injured. 6 dead. Both vessels berthed at Algeciras same day. Both sustained damages. (Mon. July 17 2000)

On July 15 at 0001 LT at Nouadhibou bay, Mauritania, Pirates from small speed boats boarded a container vessel & stole ship's stores & equipment. Crew mustered on deck & pirates escaped in their boats. The master reported that he contacted Cigading authorities & Merak radio but there was no response. (Thurs. July 15 2000)

M/V Don Martin Senior V, sank near Bantayan island, 490 km (300 miles) south of Manila. Passing vessels and the coastguard rescued 92 passengers & crew of the Philippine ship. Four people are missing, including a 5 year-old boy. The vessel is owned by local firm Palacio Shipping Inc. The area has been lashed by rain & strong winds from a tropical depression. Coastguard said the ship had sent a distress signal early on July 14 because it was taking on water. (Fri July 14 2000)

THE INCREDIBLE July 14 YUKON COINCIDENCE - Two fleet naval vessels named "Yukon" - The San Diego Sea Gods? - Go Figure.

YUKON #1 -- Two U.S. naval vessels collided late July 13 while refueling 180 miles west of Oahu causing extreme structural damage to both ships but no injuries to crew, said the U.S. Pacific Fleet. The fleet oiler of the military Sea Lift Command's USNS Yukon, crew 100, was refueling the USS Denver , an amphibious transport dock ship based in San Diego with crew 380, west of the Hawaiian island of Oahu when the incident occurred at about 6:15 p.m. LT /12:15 a.m. EDT. (Fri. 14 July 2000)

All this over the sinking of a sister?

THREE HOURS LATER - YUKON #2 -- The 366-foot, 2,890-ton former Canadian destroyer HMCS Yukon (not USNS Yukon, above) that was to be sunk on July 15 to build an artificial reef, an event expected to draw thousands of spectators, reached its undersea destination ahead of schedule July 14 after it took on water. The former Canadian warship sank about 12:30 am Friday, about 1 1/2 hours after she began taking on water off San Diego's Mission Beach. The U.S. Coast Guard rescued 3 caretakers from the ship. One water pump aboard the vessel had been unable to handle incoming water, which was pouring in at a rate of 500 gallons a minute. Caretakers were not injured. The cause of the sinking is under investigation, but authorities noted that at least 50 holes had been cut into the vessel to serve as passageways for divers. San Diego children were scheduled to participate in a ceremony on July 15 whereby the game "Battleship" would determine who would push "the button" to sink the ship. (Fri. July 14 2000)

LESSON: Just try to repeat this "Yukon coincidence" again! The historic Port of San Diego is well advised to treat it's ships well in the future, but the meaning of all this will elude us. WOW! Don't mess with the San Diego Sea Gods!

M/V BAUMWALL (3,999 gt, built 1998) drifted off her route & grounded off Kotka on Jul 12. No leakage or oil spill was reported. The vessel was subsequently towed into Kotka for inspection. (Fri July 14 2000)

The aluminum-alloy ro-ro cargo ferry M/V NGV ALISO sustained heavy weather damage 7 miles out of Leghorn, Jul 8-9, while en route to Bastia, with 444 passengers. The vessel returned to the port where damages were found to several portholes & to the roof of her upper deck. NGV Aliso was taken to Marseilles on Jul 11 & is expected that she will be out of action for about 10 days. (Thurs July 13 2000)

On July at 1500 LT in position 15:39.3N - 041:26.5E, Southern Red Sea, 2 speed boats with 5 pirates in each attempted to come alongside a bulk carrier. Ship's crew mustered and turned on hoses. As a result the boats moved away. (July 13 2000)

M/V ORIENT PEARL (2,495 gt, built 1981) sank near Umashima after a collision with tanker M/T SHOWA MARU NO. 5 (2998 gt, built 1993) off Dokaiwan Lighthouse, Fukunka Prefecture on Jun 25. P&I club currently arranging wreck removal. (Wed July 12 2000)

On July 7 2000 at 0258 LT at Samarinda River Roads, Indonesia. Four pirates armed with knives boarded a general cargo vessel from stern & stole a life raft. The duty officer noticed them & raised the alarm. When the duty policemen fired upon the pirates, they jumped overboard & escaped in a small wooden boat. (Tues July 11 2000)

On July 7 2000 at 0515 LT at position 00 49N 103 35.5E, Durian straits, Indonesia. Five pirates armed with long knives boarded a container vessel, entered 2nd officer's cabin, tied him with plastic rope & stole all his money, gold ring and personal effects and asked him to call the captain. The chief officer saw the pirates & raised the alarm. The pirates jumped into the sea & escaped in a speed boat. (Tues July 11 2000)

The United Arab Emirates passenger/general cargo M/V WURWOOD, ex AL JAZYA, (5,426 gross) had engine trouble off Oman, in lat 17 30N, long 56 20E, Jul 9. Still anchored in same position Jul 10. Tug Lulu proceeding. (Tues July 11 2000)

PIRATES shot & wounded a crewman on board the reefer M/V Minnesota after it was boarded at anchor in Puerto Bolivar, Ecuador. Other ships are reported to have anchored further out to sea after the incident. How badly injured the crewmember is not known. (Sat. July 8 2000)

On 02.07.2000 at 2059 LT at berth no 9, port Conakry, Guinea. A general cargo vessel was attacked by pirates. Further details are awaited. (Fri. July 7 2000)

0n 02.07.2000 at 0015 LT at Penang container terminal, Malaysia. A container vessel at anchor was boarded by 2 pirates. The pirates were spotted by duty seamen who informed bridge and subsequently alarm was raised. On hearing whistle & fire alarm, pirates jumped overboard and escaped. (Fri. July 7 2000)

The Maltese M/V PIONEER SKY, 11,212 gt (built 1981), had main engine breakdown June 25 and towed to an anchorage off Buenos Aires, where arrived July 2. Repairs completed & awaiting orders. (Fri. July 7 2000)

The Antigua & Barbuda general cargo vessel M/V SOUTHERN AMELIA II (4,410 gt), on her maiden voyage from Shanghai to Oregon, sustained severe structural damage, with resulting ingress of water, due to "Typhoon Kirogi" in lat 17 18.9N, long 132 55.17E, on Jul 4. Several vessels proceeding. (Thurs. July 6 2000)

New York Harbor Pool Table -- as the ocean liner RMS Queen Elizabeth II got into a fender-bender with 2 moored warships July 5, a day after all 3 vessels took part in the 4th of July festivities. The QE2 was entering a Hudson River slip when it bumped the Japanese warship Kashima, which in turned banged into the British warship HMS Manchester. Damage was slight: scraped paint on both the QE2 & the Kashima, scrapes & some bent metal on the Manchester. No injuries. Thousands of tall ships & other vessels sailed through New York Harbor on U.S. Independence Day. (Wed. July 5 2000)

A huge oil slick leaking from the Japanese M/T Takeo Maru that sank more than 20 years ago is lapping against a port on Russia's Sakhalin Island in the Pacific. Winds 1st blew the 1.8-mile-long, 300 yard-wide slick out to sea, but the gusts reversed course & sent the oil towards the piers of Shakhtyorsk. Boats splashed absorbent chemicals on the spill & used booms to control its flow. It is too early to assess ecological damage. The Japanese ship sank off Sakhalin Island during a storm in 1979 with its fuel tanks full. The oil leaked because a rusty tank had ruptured. Divers previously attempted to weld shut small holes in the tanks. Work was slowed by a dispute over whether Russia or Japan should pay for it. (Wed. July 5 2000)

Liberian oil/chemical tanker M/T TIMASHEVSK (26,218 tons gross, built 1996) sustained a damaged propeller after striking navigation buoy while leaving New York harbor on Jun 30. Coast Guard boarding party inspecting vessel discovered 125 kilos of cocaine on board. The drugs were confiscated but no crew members were charged as the drugs were found in a compartment on an outer section of the vessel's stern & it was unclear whether the crew knew of it's existence. (Mon. July 3 2000)

A true vessel disaster -- as a Walnut Creek company failed to find an investment angel June 30 to help it bring the SS Lurline -- the world's oldest ocean liner -- back to San Francisco's waterfront. The Ocean Steamship Co. had until Friday to raise at least US$750,000 to buy the vessel, which has been berthed in Tampa, Fla., for the past five years. A year ago, the company introduced its US$45M plan to refurbish the Lurline into a luxury floating hotel and dock it by San Francisco's Pier 35 as a monument to the days when SFO was a major port city. The Lurline, built 69 years ago for the Matson Navigation Co., carried thousands of travelers between San Francisco and Honolulu in its heyday. It is still in good shape, said the ship's agent in Tampa. On Mon. morning July 3, a tugboat will tow the Lurline to a scrapyard in India. (Sat. July 1 2000)

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

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

OUR "D" Section: FF in Cyberspace

7. The Cargo Letter "Cyber Ports Of Call"

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

IATA Annual Report 2000 now online.

The Latin American View of NAFTA ........ read the new article "A Latin American Perspective On The NAFTA Model For Trade & Environment Issues In The FTTA Context," by Eduardo Gitli & Carlos Murillo, May 2000. The purpose of this article is to express a Latin American viewpoint of the NAFTA model for Trade & Environment issues in order to draw conceptual and operational conclusions for the Free Trade Area of the Americas negotiation process. A Spanish version is also available.

"United States: Import Measures on Certain Products from the European Communities" ............ a new WTO panel report is now available on the WTO website.

GPS Protocol Changes

American Association of Port Authorities ........... new companion site to Seaports of The Americas 2000.

E-Freight World .......... the annual meeting place for learning, networking & implementing e-business in the European freight transportation industry. Conference & Workshops: 19th & 22nd September 2000, at the Cumberland Hotel, London

Port of Rotterdam ........ the new B2B effort.

Maritime & Port Authority of Singapore (MPA) ......... has launched an Internet portal with the goal of providing the maritime industry with a comprehensive range of information services.

Odyssey Marine Explorations ............ current expedition is the "Cambridge," a code-name for a large British war ship that sank in deep water over 300 years ago during a severe storm. The company's management believes the "Cambridge" was carrying a large cargo of coins with a potential numismatic value between US$200M & US$500M or more.

1000th Anniversary of The Vikings 1st Discovering Newfoundland ............. as Viking ships from various places in Scandinavia are on their way to Canada. Modern Vikings are not sailing themselves. They are sending their ships on container ships. Pictures of the loading of the Viking ship Glad at the Port of Gothenburg.

LogicChain ...... a tactical planning tool that helps achieve supply chain efficiency by minimizing expenses, improving service levels & creating collaborative reports that can be shared over the Internet.

LogicNet ..........a strategic network design tool that helps optimize the size & location of your facilities to improve the overall functionality of your distribution network.

E Big Mac? ......... a food supply chain B2B.

Movie Trailer For "The Perfect Storm"

Extreme Transportation .......... ride roller coasters in QuickTime.

It's Your Movie ........ world's 1st interactive film in which you participate.

Desert Mummies of China


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

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