_{The Cargo Letter}

• Free Hemisphere In Five?........ as at the Third Summit of the Americas held from 20-22 April in Quebec City, Canada, heads of state representing 34 N. American, S. American & Caribbean countries reaffirmed their political commitment to strengthening hemispheric relations by approving the implementation of a Free Trade Area of the Americas (FTAA) by Jan. 2005.
• U.S. Shopping Spree ........ as Swiss forwarding & logistics group KŸhne & Nagel AG has set aside US$200M to US$400M for a possible logistics acquisition in the U.S., company officials say.
• Panalpina More Itself ........ as it has bought back the 45% stake in airfreight operator SwissGlobalCargo which SAirLogistics purchased in April 1999. Concurrently Panalpina's principal shareholder, the Ernst GÓhner Foundation has repurchased SAirGroup's 10% stake in the share capital of Panalpina Holding. As a result, it has become the Panalpina Group's sole shareholder again.

• Panama Rails -- No Sleeping Cars ........... as the Panama Canal Railway Co. (PCRC), a joint venture of Kansas City Southern Industries Inc. (KCSI) & Mi-Jack Products, will provide an ocean to ocean transshipment service between the Atlantic & Pacific oceans via a railway running parallel to the Panama Canal. PCRC is finalizing plans to restore & modernize the 143-year-old, 47.6-mile transcontinental railroad. In early in 1998, the Panamanian government awarded the joint venture an exclusive 25-year concession to operate the railway, then on June 19, 1998, it officially signed over the railway to the PCRC. Construction began in Feb. 2000 with completion set for mid 2001. The joint venture plans to invest approximately US$75M to restore the railway, construct terminals & purchase terminal equipment. In its 1st full year of operation, PCRC is expected to transport 75,000 TEU between Panamanian ports on the Atlantic & Pacific oceans.

• Cross Border Rail Merge .......... as Canadian National Railway & Wisconsin Central Transportation Corp. have filed an application with the U.S. Surface Transportation Board for a US$1.2B merger of the railroads. CN said its application has the support of more than 280 shippers, local governments, chambers of commerce, public agencies, & other railroads. Wisconsin Central shareholders voted overwhelmingly to approve a takeover offer by Canadian National Railway Co.

• The Dotcom Struggle & Stagger Continues.......... as E-logistics providers have yet to deliver the services the transport & logistics market really need. Only several vendors may offer the right stuff, while others are going under. Read the entire JOC online story.
  http://www.joc.com/enews/20010412/sections/ecomm/w81388.shtml
• E-Standards ........ as Rival E-logistics ventures, GT Nexus & Inttra, are talking about standardization, to create one interface for cargo tracking & other web-based services of the shipping companies. Read the JOC article.
  http://www.joc.com/enews/20010420/sections/ecomm/w75772.shtml

• Kozmo-Kazie.com .......... as the freight forwarder for shopping ordered via Internet has closed its virtual doors. The E-Commerce distribution equipment turns out to be too expensive. Visiting Kozmo.com on the Internet now produces an error message. The courier service in 9 U.S. states has also been halted. Kozmo.com had hoped to be saved by PDQuick, an online grocer, but it only delivers in the Los Angeles area, and discovered just in time that managing its own distribution equipment would involve too many fixed costs. With the disappearance of Kozmo.com 1,100 jobs go too. Management says it has enough money to pay its creditors. Some US$280M had been pumped into the company, US$60M of which came from Amazon.com. Indeed, the transport Dotcom shakeout continues. In other transport E-news >>> Ben Gordon, who formed online transportation company 3PLex.com with a friend from Harvard Business School in Sept. 1999, has stepped down as CEO. >>> Dutch E-Commerce logistics service provider ALS has been declared bankrupt following its failure to acquire extra finance.

• European Commission On A Sunday Drive? ....... as it wants to allow truckers to drive on Sundays & public holidays within the EU. The EU Transport Council, consisting of the European ministers for transport has met to discuss this. For driving in most U.S. cities, however, we'd rather leave open the weekends for trucks -- and ban Mondays through Fridays!

• EU Customs Concern ........ as the European Shippers' Council (ESC) is concerned by the European Commission's proposal on the reform of Customs Transit Regime, which will be finalized by June 2001. The proposal aims at amending the declaration of transit by introducing new data requirements such as a customs code and the value/nomenclature & calculation of Customs duties & taxes.

• U.S. Customs Report Card ........ as it continues to meet increases in trade volume & rising public demand to crack down on the illegal drug trade, while faced with a "relatively static" budget. The agency outlined its fiscal 2000 performance in an annual "scorecard" to Congress last week. The complete Customs Fiscal 2000 Accountability Report is on line.
  http://www.customs.gov

• New Treat At CAFE Customs ............ as U.S. Customs will begin implementation of a pilot system on May 7 to improve handling of trucked in-bond cargo entering the US. The system, Customs Automated Forms Entry System or CAFES, will use a redesigned in-bond form with a two-dimensional barcode (PDF-417). This type of barcode, which resembles a checkerboard, is able to contain larger amounts of data than traditional vertical-lined barcodes used for land-border clearance. Customs will provide free software to participating shippers to produce the in-bond forms (Customs Form 7512) with the 2-D barcodes. Truckers will carry these forms with them as they transport their shipments to the border. At border crossing, Customs inspectors will scan these barcodes to verify the shipments with information already in the agency's system, & to determine whether to let shipment pass or hold the cargo for inspection.

• New CAT Kit ......... as U.S. Customs has released the revised version of its Compliance Assessment Team Kit, which is used by the agency's auditors to review the compliance of importer records. The new CAT Kit includes previous changes announced to the program by the agency at the Customs Trade Symposium last Nov. It contains handbooks, audit programs, sampling plans and other policy & guidelines. To download the new CAT Kit, access Customs' Web site & click onto "Importing & Exporting."
  http://www.customs.gov
• Entry Summary Errors Less Tolerated ....... as U.S. Customs is adopting a new policy whereby errors found in an Entry Summary will cause the to be rejected with a voided presentation date as if it had never been received by Customs. Accordingly, it is vital that importers work to avoid common mistakes -- such as submitting an unsigned check, forgetting to submit a check, or submitting an invalid entry number. Importers will still have 10 days to file a correct return, but will be required to know & follow the new policy -- outlined on the Web.
  http://www.customs.gov/impoexpo/esa.htm

• Illegal Food To Be More Expensive ......... as U.S. Customs has amended rules to raise liquidated damage amounts against importers of illegal food shipments, effective April 27. When goods with admissibility concerns enter the U.S., Customs can conditionally release the goods under bond. If within 30 days Customs decides there are problems with the goods, the agency could demand the return of the goods into its custody. Importers who fail to meet this requirement are currently subject to liquidated damages of 3 times entered value of the merchandise under Customs rules. Under the new rules, Customs will assess liquidated damages equivalent to either the domestic value or 3 times the entered value, which ever is greater. The U.S. government is under pressure to prevent illegal food shipments from entering the country. These are goods that have been either adulterated, mislabeled or manufactured in unsanitary conditions. Watch that mudfish.

• Next CHB Exam Date ......... as U.S. Customs will conduct its next round of customs house broker (CHB) license exams on Oct. 1. License applications may be obtained from local Customs ports. The fee is US$200 per applicant. Applications must be received at the port where the applicant intends to take the exam by Aug. 31 to be considered. The 4 hour exam consists of 80 multiple choice questions, requires a score of 75% to pass -- and is hard as hell.

• Dangerous Reading ......... as Beijing has told customs & border officers to prevent Hong Kong travelers from smuggling the Chinese language version of "The Tiananmen Papers" into the mainland, according to local newspapers. Anyone trying to enter the mainland with one copy of "June 4: The True Story" as it is called in Chinese would have it confiscated, while anyone with 2 or more copies could face criminal charges --the I-mail and Sing Tao daily newspapers reported. The Beijing edict also banned all mainland officers -- including those who stay overseas for business or political purposes -- from buying, reading or spreading the content of the book, the I-mail said. The book offers what its editors say are detailed minutes of secret meetings between top Chinese Communist Party officials on the pro-democracy protests of 1989 in mainland China. Hundreds, perhaps thousands of unarmed civilians were killed when top Chinese leaders sent in troops & tanks to end weeks of protests on June 4, 1989. Beijing responded to the publication of "The Tiananmen Papers" by saying the editors had fabricated materials & distorted the facts.

• "Smugglerless Wednesdays" ........... as Thailand has begun executing drug smugglers every week, starting Wed. April 18, in a bid to deter traffickers by sending a clear signal that this government is serious about taking tough action against them. Executions are carried out by firing squads in Thailand. The government is said to have a 5 month supply of candidates on hand, but plans to restock.

• The Virgin Mary ATM .............as a family nabbed on April 13 with US$1M in cash stuffed in baggage & babies' diapers told Colombian Customs authorities that the money had suddenly appeared along with an apparition of the Virgin Mary. Colombia Customs said that officers found U.S. dollars stuffed in baggage, children's clothing & even diapers after stopping a family of 3 adults & 2 minors at Bogota's Int'l airport. The Colombian nationals had arrived from Spain on an Iberia flight, & one of group's female members tried to explain the money by saying the Virgin Mary had appeared before the family & the greenbacks had simply fallen into their hands. Adult members of the group were arrested. No warrant has been issued for Mary. It is illegal to bring more than US$10,000 in cash into Colombia without declaring it & authorities have stepped up efforts to crack down on illegal money entering the country, the world's biggest cocaine producer.  What next?

2. The Cargo Letter Financial Page

• Alitalia. DOWN with a US$200.26M loss for 2000, despite analysts expectations of a US$158.4M profit.
• A.P. Moeller (owner of Maersk Sealand). UP with a 79% jump in 2000 pretax profits to US$1.02B.
• British Airways says that the combination of the U.S. economic slowdown, the foot-and-mouth outbreak & a computer glitch in its booking system cost up to US$29M in lost revenue last month.
• Cargolux (Luxembourg airline). UP with net profit in 2000 of US$33.0M, up from US$30M in 1999. Operating profit more than tripled to US$36.2M.

• CMA CGM. UP by 98% in 2000 as revenue surged 39% and traffic grew 20%.  Operating profit reached US$110.4M & net income was 125% higher at US$97.5M on revenues of US$1.83B.

• CHINA Southern Airlines. UP as turnover reached US$1.84B in 2000, up 14.1%.
• CNF Inc. (parent of Emery Worldwide). DOWN with 1st-quarter net income of US$13.5M, down from US$33.4M in the 1st quarter of 2000, as the slowdown in the U.S. economy took its toll on the company.
• Delta Air Lines. DOWN with a net loss of US$122M & a diluted loss per share of US$1.02 for the March 2001 quarter versus net income of US$172M & diluted earnings per share of US$1.27 in the March 2000 quarter.
• Evergreen Marine Corp. (Taiwan) (& Panamanian subsidiary Greencompass Marine) UP with net profit of US$$38M for last year, up 35%.
• Forward Air. UP with its 11th consecutive record quarter of comparative operating revenue & earnings. Operating revenue for the quarter ended March 31, 2001, increased 22.9% to US$60.7M, compared with US$49.4M for same quarter 2000.
• Hapag-Lloyd. UP with a 117% increase operating profit of its container shipping arm Hapag-Lloyd Container Line for fiscal year ended Sept. 30, to US$171M.
• The Hub Group Inc. (non-asset based freight transportation management) DOWN with reported net loss of US$700,000 for the 1st quarter of 2001, compared to a net loss of US$300,000 in the 1st quarter of 2000.
• Japan Airlines (JAL). UP for the year ended on March 31 by 18.8%, as net profit was US$313.3M in 2000/01.
• Kuehne & Nagel Int'l. UP with a record result last year -- turnover increasing by 24.3%, & gross profit rising by 17.4% to US$852.6M. Net income improved by 32.2% to US$73.9M.
• Martinair. DOWN with losses of US$62.7M for the 1st time in its history -- blamed on high fuel costs, high fly over & handling charges & the high value of the U.S. dollar.
• Matson Navigation Co. DOWN with a 12.3% dip in operating profit, to US$17.5M, on revenue of US$196.6M, down 1.8%.
• Northwest Airlines. DOWN with 1st quarter net loss of US$123M or a US$1.47 loss per common share -- compared to a 2000 net loss of US$42M.
• C.H. Robinson Worldwide. UP as net income rose 19.2% to US$18.1M on revenue of US$732.5M, up 12.7%. -- net revenues rose 15.2% to US$113.3M, while income from operations rose 17.1M to US$29.4M.
• Roadway Express. DOWN with net revenue of US$650M for 1st quarter of 2001, down 4% when compared to net revenue of US$677,319,000 for 1st quarter 2000.
• Trailer Bridge Inc. (U.S. mainland/Puerto Rico shipping) DOWN with a net loss of US$9.6M for the 4th quarter & a loss of US$10.3M for the year ended Dec. 31.
• Union Pacific (North America's largest railroad) DOWN as net income for the 1st quarter was US$181M, down 2% from year-earlier.
• United Airlines. DOWN with 1st-quarter loss of US$305M or a loss per basic share of $5.82.
• United Parcel Service. DOWN with an 8.9% drop in 1st-quarter earnings, to US$582M, while revenues rose 45% to US$7.6B.
• US Airways Group, Inc. DOWN with a net loss for the 1st quarter of 2001 of US$171M & an operating loss of US$228M.
• Zim Israel Navigation Co. UP with reported net income for 2000 of US$29.6M, up 18.4% from the US$25M reported in 1999 -- against a loss of US$4.9M in 1998.

Please click below for other sections:
Section B
Section C
Section D
Section E

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

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