The Cargo Letter
Section A: Trade, Financial & Inland News | Section
B: FF World Air News |
Section C: FF World Ocean News | Section
D: FF in Cyberspace |
Section E: The Forwarder Broker World
- HKG Stays
On Top .......... as Hong Kong has maintained position as the world's
busiest container port in 2000, with total container throughput reaching
18.1 million TEU. The performance represented growth of 11.7% in container
throughput over 1999, underlining the port's unrivaled position as the world
number one. "The throughput of Hong Kong port is expected to grow from
the base figure of 18 million TEU to 30 million TEU in 2010 & 40 million
TEU in 2020," Hong Kong's Secretary for Economic Services said.
- Experts Baffled ......... as shipping
industry officials are baffled by an unofficial report prepared by a
research unit of the World Bank claiming that elimination of price setting
under conferences would cause prices to drop 25% & produce an additional
cost saving of up to US$2B in the U.S. foreign trades. World Shipping
Council president Christopher Koch is planning to meet with authors of the
report to determine how they arrived at their conclusions. Although the
report was performed by the Development Research Group, a World Bank unit,
the World Bank said the views in the report "are those of the authors
& should not be attributed to the World Bank." In 1999, revenues of
all carriers in the transpacific and transatlantic trades combined came to
US$19.2B. A 25% rate reduction would mean a US$4.8B drop in revenues.
Carrier profits for the same period in the 2 major trades came to US$543M.
If such losses were to occur, "services would deteriorate and chaos
would result," Koch said.
- APL Says:
Change The Way You Shop ......... as shippers & ocean carriers are
"confused" when they focus on narrow yearly negotiations on
freight rates, instead of looking for opportunities to increase overall
efficiencies, says Flemming Jacobs, CEO of Neptune Orient Lines & APL
Liner. Jacobs told an industry gathering in Los Angeles this month that
shippers should view ocean transport as an opportunity to reduce supply
chain costs, rather than getting lower rates. The CEO described the
difference between particular customers. There is the one, who makes his
carrier selections mainly on a comparison of ocean freight rates per
container, forgetting to select on value-added supply chain opportunities.
The other sees container ships as floating warehouses, that not only take
goods from port to port but are part of a longer & more complex chain.
In the middle is the confused shipper who sees the potential that
partnerships with carriers can bring and who looks for long term contracts,
but then remains locked into annual bids and tenders. At the moment, the
majority of contracts are simply price agreements, not service contracts,”
Jacobs told Journal of Commerce. He added that as far as contract business
was concerned, he believes that too many shippers are still in the
‘confused category.’’ In the meantime shippers are pressing carriers to
assume more liability in contracts. Shippers try to do this, since
confidential contracts have been made legal under the Ocean Shipping Reform
Act. Some carriers have warned that if they are forced to assume more
liability, they would have to pass on the additional insurance costs back to
shippers. Jacobs said he has told many shippers that they are "shooting
(themselves) in the foot" if their contracts include only a low minimum
quantity commitment to APL to be able to shop around during the contract.
"You cause our costs to be higher than necessary, and when you do so,
you will ultimately have to pay."
- Call To Halt "Sea Slaves"
........... as tens of thousands of sailors work in virtual slavery on
merchant ships in the Asia-Pacific region, the Int'l Commission on Shipping
said on Mar. 7. ICONS, an independent group set up to study shipping
conditions, released a study claiming sailors work in slave-like conditions
in up to 15% of the world's ships. The "Ships, Slaves &
Competition" study says many ship workers endure minimal safety, long
hours for little or no pay, are fed poorly and may be subject to rape &
beatings. The report said crews told stories of sailors disappearing after
complaining to officers and of being blacklisted if they sought union help
to collect unpaid wages. ICONS chairman Peter Morris said during a year long
investigation the commission received 125 written submissions & held
public & private meetings with industry operators and governments. The
commission said substandard working conditions flourished on some vessels
because of secrecy on ownership that made regulation difficult.
The slave practices are supported by cargo owners seeking lower
freight rates at the expense of the majority of ship operators, who follow
proper labor practices, Morris said.
- Vamos A
Cuba! ......... as the U.S. Treasury Dept. has granted
Jacksonville-based Crowley Liner Services the right to carry
"licensed" cargo such as food & medicinal supplies from the
U.S. to Cuba. Crowley said the move follows the easing of the U.S.
government embargo. The carrier would not give details of the service, other
than it hopes to start sailings to Cuba next month, & that all sailings
will be "contingent upon shippers obtaining the necessary
license," a spokesman said.
- FMC Will
Investigate US$100 SED Charge ........ as the U.S. Federal Maritime
Commission has launched an investigation into the ocean carrier industry's
US$100 charge to handle paper shipper's export declarations for exporters
& freight forwarders. Carriers set the charge in their tariffs last year
after they negotiated an agreement with the U.S. Census Bureau to encourage
exporters & freight forwarders to file their export declarations through
the government's Automated Export System. The fee went into effect Nov. 1.
Census officials say they had no role in setting the US$100 carrier charge.
However, the agency believes carriers have been put in an awkward position
with respect to SED filing. Carriers are legally responsible to collect SEDs
for the government, but have no authority to enforce the collection of these
documents. The FMC wants to determine whether the charge has been reasonably
imposed on the industry. Many forwarders believe the FMC's investigation
comes too late.
- FMC Hits NVO ......... as Stallion Cargo
Inc., an MIA based NVOCC, has been fined US$50,000 by U.S. Federal Maritime
Commission administrative law judge Norman D. Kline. Stallion Cargo was
cited for misdescribing cargo tendered to 2 vessel operators on 15 occasions
& for failing to charge its applicable tariff rates on 152 occasions
from 1998 to 2000.
- SED Software Help ........ as the U.S.
Census Bureau's Foreign Trade Div. will offer exporters & freight
forwarders software to allow them to process their shipper's export
declarations off-line before transmitting them to the government's Automated
Export System. In 1999 Census, through its systems applications developer,
Flagship Customs Servicers, developed the ability to connect to AES through
a free Internet link, called AESDirect. The software, AESPcLink, will be
available next month on either compact disc or download from the AES Web
Giant ......... as the government has approved construction of a
floating city: a massive, luxurious ship that would sail around the world
with thousands of passengers. The Miami based company Freedom Ship Int'l
received the go-ahead to start building the US$8.5B boat in a bay on the
Central American country's Atlantic coast. Plans call for a vessel more than
a half-mile long, 750 feet wide & about 25 stories high, with a landing
strip for small jets. The developers say it would feature many staples of a
city: hospitals, hotels, supermarkets, restaurants, & casinos. The
vessel would differ from traditional cruise ships because it would house up
to 90,000 permanent residents who had purchased apartments on board at
prices ranging from US$140,000 to US$3.5M.
- BMW Looses
On Harbor Maintenance Tax ......... as the U.S. Court of Appeals for the
Federal Circuit has upheld a lower court decision that U.S. Customs
correctly assessed the Harbor Maintenance Tax on BMW cars & parts
shipped to a U.S. port's foreign trade zone. BMW Manufacturing Corp. paid
the tax, & then sued the U.S. government for recovery of its payment. In
denying recovery, the court held that the HMT was not a customs duty. It
noted that Congress created specific HMT exemptions, and that deliveries to
a foreign trade zone were not among them. The appeals court ruled that the
HMT was a generalized federal charge for the use of certain harbors. Since
BMW shipped its cars through one of those harbors, the HMT had been properly
Cho Yang ........ as it is closing offices in Atlanta & Chicago
& will be dismissing at least 16 employees. There are bankruptcy rumors
for the Korean carrier.
- No More Mitsui O.S.K Lines .......... as
the Japanese shipping group is now operating container services under the
name MOL. The move to the shorter brand name is linked to the adoption of a
revised logo for the liner sector. The company's name remains "Mitsui
O.S.K. Lines." The company has started to rename its containerships,
using MOL as part of the vessel names.
- Maersk Ends Feud With Singapore ..........
as 6 months after Maersk Sealand announced it would move its Asian shipping
hub from Singapore to Malaysia, the shipping giant & Singapore's port
authority have patched things up. Denmark-based Maersk & Singapore's PSA
Corp. said that PSA will provide Maersk container vessels with customized
services when they call in Singapore, including berthing on arrival.
"We can't deny that we didn't see eye to eye a few months ago,"
said Maersk's CEO in Asia. "But we have reached a level of confidence
that will allow us to make a forward reaching contract." After Maersk
announced it was leaving Singapore in Aug., its ships would often sit for
days waiting for a berth to unload its cargo. Maersk then shifted its New
Zealand routes from Singapore to Hong Kong to avoid costly delays.
- New Maersk
Feud With CSX .......... as CSX Corp., former parent company of Sea-Land
Service, is involved in a dispute with the A.P. Moller/Maersk group over a
final settlement for the sale of Sea-Land's international shipping business
in 1999. CSX said its agreement with Maersk provided for a
"post-closing adjustment" to the sales price, based on the change
in working capital between June 25, 1999, and Dec. 10, 1999, when the
takeover was concluded. CSX said it expects to receive about US$60M in
connection with the post-closing adjustment, but this amount is disputed.
- Hey, Maybe Maersk Should Just Pay ECT?
............ as Europe Combined Terminals BV, the large Dutch container
terminal company, has issued a claim of about US$180M plus interest to CSX
Corp., the former parent company of Sea-Land Service, for breach of
contract. ECT is the owner of the Rotterdam Container Terminal, operated by
Sea-Land prior to the shipping line's sale to Maersk in Dec. 1999. The Dutch
terminal operator "has claimed that the sale of the Int'l liner
business to Maersk resulted in a breach of the Sea-Land terminal
agreements," a spokesman for CSX said. ECT has refused to accept
containers at the former Sea-Land facility tendered by Maersk & is
seeking compensation from CSX relating to the alleged breach, according to
- ABCs of
Service Contracts .......... as members of the ABC Discussion Agreement
have asked for FMC clearance of authority to enter into joint service
contracts, to adopt voluntary contract guidelines & to share vessel
space on an ad hoc basis. The members are Maersk-Sealand, Hamburg-Sud, King
Ocean Service S.A. & Seafreight Line Ltd. The carriers operate between
the U.S. Atlantic and Gulf ports & ports in Aruba, Bonaire &
Curacao, Netherlands Antilles. Evergreen Marine is no longer a member of the
- OOCL Will
Sell Internet Technology ......... as the carrier is offering to sell
its CargoSmart ocean carrier technology unit to other carriers in an
arrangement that would resemble the ownership structure of the Intra-carrier
portal with P&O Nedlloyd & others.
Hangs On - Goes Long Term .......... as the online ocean freight
auctions provider, said it is launching "NaviPact," an application
to enable shippers & carriers to bid for & conclude long-term ocean
freight contracts. GoCargo.com also said that Mitsubishi Corp. will adopt
its new application for the negotiation and procurement of long-term ocean
freight shipping agreements. GoCargo.com's further move towards long-term
contracts follows the closure of several pure spot auction Web sites for
ocean shipping. GoCargo.com does not disclose how many TEUs of freight were
transacted through its Web site. However, it said that it has hosted more
than 11,000 auctions since its launch in 1999.
- With ANZDL,
You Won't Be Lonely, ........ as it has introduced a new electronic
service which forwards customers daily container status reports via e-mail
-- called "Notify Me" -- it allows shippers to select a tracing
option based on the type of information they or their customers require.
Shippers need only enter Australia-New Zealand Direct Line's Web site once
to set up their personal preferences, then receive a status report once a
day for containers reaching a specific move. A similar service was launched
this month by Direct Container Line (DCL), the California-based NVOCC.
- Rates Likely To Remain Flat ........ as
most ports & shipping companies are predicting that volumes on the
bellwether Trans-Pacific eastbound trade will grow no more than 6% this
year, well under half the growth rate of 2000. That expectation is impacting
negotiations for annual eastbound service contracts.
- But Australia Up ....... as MSC Lines has
decided to implement a rate increase (GRI) on the Hong Kong & southern
China to Australia trade, effective from April 9. The GRI will bring the
levy per TEU to US$150, & to US$300 per FEU/FEU HC, and will be
applicable to shipments from Hong Kong or southern China to Sydney,
Melbourne, Brisbane, Adelaide & Fremantle.
- But India Up ......... as carriers of the
Europe Pakistan Bangladesh Ceylon Conferences said they will increase rates
from northern Europe & the Mediterranean to the Indian Subcontinent on
April 1 -- from the UK, North Continent & West Mediterranean ports will
rise US$150 per TEU) & US$250 per FEU. Carriers of the India Pakistan
Bangladesh Ceylon Conferences are Andrew Weir Shipping (Ellerman),
Bangladesh Shipping Corp., Ceylon Shipping Corp., CMA CGM, Contship
Containerlines, Hapag-Lloyd, Himalaya Express, Maersk Sealand, P&O
Nedlloyd, Pakistan National Shipping Corp., Rickmers Lines, Safmarine,
Senator Lines, Shipping Corporation of India, United Arab Shipping Co.,
Yangming & Zim Israel Navigation Co. Indeed, several conferences have
previously announced rate hikes -- most being set to start on April 1, 2001.
- New `Mini'
At Shanghai .......... as a 10 foot container has been introduced by
Shanghai Int'l Ferry Co. Ltd to explore the space potential of vessels by
making full use of less-than-20-foot vacancies. Freight rates for the new
container are expected to be 40% lower than those for a
20-foot-equivalent-unit (TEU), which may make small shipments more
economical. The company has not, however, revealed how it plans to transport
the containers overland. Container trucks are ill-equipped to deal with such
boxes, & may not be able to accommodate the `mini' without
Shanghai ......... as it has commenced a major deep-water port project.
The new port, Yang Shan, will be located in Shengsi, Zhejiang province, some
40 km away from Nanhui County in Shanghai. With the completion of Yang Shan
Port, Shanghai will be positioned as a pivotal container port on the west
coast of the Pacific. The project is scheduled to cost US$12B in its 1st
phase, expected to be finished in 2010. The whole port will take 20 years to
complete. An investment of US$1.45B will be injected into the project this
year. Last year Shanghai achieved a total container throughput of 5.61
million TEU & is expected to handle 10 million TEU annually by the year
2005. In 2010, Shanghai will be able to handle 20 million TEU annually when
the 1st phase of the deep-water port is completed. The channel of the
Yangtze River is only 8.5 meters deep, unable to accommodate 50,000-ton
container ships. Usually ships of 3,000 to 4,000 TEU need a 12.5 meter deep
- FMC Revoke OTI Licenses ........... as the
U.S. Federal Maritime Commission has revoked the ocean transportation
intermediary licenses for firms for failing to maintain a valid bond. The
firms are: Horizon Int'l Co., Long Beach, CA; Chunho Sea-Air Inc., Elk Grove
Village, Il; Patrick & Rosenfeld Shipping Corp., Miami; Kintetsu
Flexipak Inc., Houston; Pactrans Marine Inc., Los Angeles; Phantom Transport
Inc., Torrance, CA.; August Jackson Int'l Inc., Tampa, FL; Golden Jet
Freight Forwarders, Hawthorne, CA; Hudson Transport Lines Inc., New
Brunswick, N.J.; Mega Transport Inc., Inglewood, CA; U.S. Brokers Inc.,
Boston; Advanced Cargo Services Corp., Wilmington, CA.; GES Logistics Inc.,
Long Beach, CA.; Seair Export Import Services Inc., Medley, FL.; Southeast
Logistics Int'l, Inc., Williamson, Ga.; Transportation Logistics Int'l,
Six OTI's surrendered their licenses voluntarily: Alkahest Logistics
Inc., New Hyde Park, N.Y.; Lynx Int'l Inc., Eagan, Minn.; and Summit Trade
Specialists (U.S.) Inc., Medford, Ore.; Alkahest Logistics Inc., New Hyde
Park, N.Y.; Lynx Int'l Inc., Eagan, Minn.; & Summit Trade Specialists
(U.S.) Inc., Medford, OR
This Month In U.S. Navy History ......... as on Mar. 4, 1981,
the reactivation of 2 battleships, USS Iowa (BB 61) & USS New Jersey
(BB 62), & the carrier USS Oriskany (CV 34), were included as part of
the Reagan Administration's FY81 defense budget. Iowa was eventually
decommissioned on Oct. 26, 1990, after an explosion in Turret 2; New
Jersey would fire its 16-inch guns off the coast of Beirut in Dec. 1983,
but was decommissioned on Feb. 8, 1991. Oriskany was never recommissioned.
Visit the Naval Historical Center at
It continues to boom here at Los Angeles. Total
loaded container traffic increased 9.3% in January, from 259,795 TEUs in
January, 2000 to 283,876 TEUs in Jan. 2001. The Port of Long Beach's cargo
volume in January increased 4.5% to 354,441 TEUs.
Visit our new Vessel Casualties & Pirate Activity Database .........
where daily updates of these ship news are posted. Stay up to date!
sorry, but there were so many sinkings, explosions, pirate attacks, fires, cargo
mishaps, artillery battles on the water & other disasters at sea that we do
not have room to print even the highlights this month. Manypeople lost their
lives at sea this month!! But you
can read all this month's disasters at our special Internet web feature which
provides full details of each event.
the site and visit every day! Thousands of visitors can't be wrong!
NOTE: The Cargo Letter Website has
dramatic U.S. Navy photos of USS Cole disaster. Please all view the dramatic pictures at our special
"Gallery of Cargo Loss" website feature.
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
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Written from wire stories, the Associated Press,
Reuters, Hong Kong Shipping News Lloyds & other world sources.