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

OUR "C" Section: FF World Ocean News

4. FF World Ocean Briefs

• East Bound Shipper Bliss ....... as for many U.S. importers of Asian cargo, the annual tug of war with ocean carriers over service contracts is over for another year. Initially, carriers prepared for this year's contract negotiations brimming with confidence. The TSA in Nov. proposed a US$525 per 40-foot container general rate increase to West Coast ports, US$600 to East Coast ports & US$750 to inland intermodal destinations. With most service agreements having been signed by May 1 or shortly thereafter -- it did not go the carrier's way. Rates have come down -- by as much as 25%. Read the full JOC article.
  http://www.joc.com/enews/20010507/sections/ocean/w47063.shtml
• Revolution - Not Just Change ......... as Bureau Veritas expects demand for container slots to double over the next decade. The result would be that current post-panamax containerships will become too small. The organization has an answer to that -- a 12,500 TEU containership design that would provide the needed economies of scale & harness innovative technical solutions to providing more capacity. Bureau Veritas estimates that there are nearly 15 major terminals which could accommodate this size of vessel.
• Pirate Menace Grows ........ as 1st quarter figures released from anti-piracy organization ICC-Int'l Maritime Bureau show that incidents have continued to rise, with 68 actual & attempted attacks, the highest figure in 10 years. Indonesia continues to account for a high proportion of incidents, with 23 of 68 occurring in its waters. Nine incidents happened in the Malacca Straits, although 6 of them saw pirates foiled, 2 in the Singapore Straits & 4 off the Malaysian coast. Attacks in the vicinity of Bangladesh doubled to eight, with five also reported off India. The only ship hijacked during the period was M/V Inabukwa. There were no deaths or missing seafarers following incidents. Tankers & container ships were the most common targets. The IMB has added a number of 'hotspots' to its list of areas where mariners are advised to take extra caution. It says that an armed gang of pirates seems to be operating primarily within a 25 NM radius of 02N-102E in the Malacca Straits.
• Canadians Stand Tall ....... as the Canadian Int'l Freight Forwarders Assn. objects to the proposed regulatory reform of maritime liability conventions proposed by the Comité Maritime Int'l. CMI, the influential Int'l body of national maritime law associations, recently issued a so-called "outline instrument" at its Int'l conference held in Singapore in Feb. to regulate multimodal transport & to replace the current Hague-Visby Rules for the regulation of cargo loss & damage. The Canadian Int'l Freight Forwarders Assn. opposes "the outline instrument on the grounds that a proposed multimodal convention that would allow ocean carriers to contract out of inland liability is a sham. The Canadian Assn. "supports the notion of a uniform multimodal transport convention," but believes that such a convention must be "fair & equitable to all affected groups."-- The Int'l project is not yet forwarder friendly. . . . certainly not to the Canadian Int'l Freight Forwarders Assn. -- says our quite dear Canadian brother forwarder law project -- read the article -- at Forwarder Law -- http://www.forwarderlaw.com/feature/multyou.htm
• The Cargo Letter Supports On Certain Issues .........as above article said -- the Comité Maritime Int'l. (CMI) has worked on a reform of current Int'l cargo liability conventions for more than a year, partly as a result of the legislative initiatives to transform the U.S. Carriage of Goods by Sea Act of 1936 (COGSA) into a multimodal carriage law. The Canadian Int'l Freight Forwarders Assn. said many of the provisions found in the U.S. Senate bill to reform the COGSA law are also in CMI's outline instrument, including:

          * Door-to-door scope of application.
          * Uniform Hague-Visby liability limitations of 2 special drawing rights 666.67              special drawing rights per package.
          * Elimination of the "Himalaya" defense through the introduction of a carrier"              definition that conjoins all agents and subcontractorsof the contracting carrier              as parties to the contract of carriage for liability purposes.
          * Elimination of the carrier's "error in navigation or management of the defense.

• It's Got To Be "E" ......... as the U.S. House of Representatives has passed legislation mandating the electronic filing of all shippers' export declarations (SEDs). Senate & White House approval is expected to follow. FMC said that fewer SEDs are handled via paper filings & also took note of the fact that the House was poised to pass the bill.
• "E" Manifests ........ as U.S. Customs will give ocean carriers nationwide the ability to transmit paperless outbound manifests through the government's Automated Export System on June 1. Customs began developing its AES vessel transportation module in 1999. A "limited release" of the system was conducted last July at the Port of Charleston, S.C., but a glitch in the agency's computer system put the module's implementation on hold. The agency has since fixed the problems. To participate, carriers have to successfully complete the Vessel Transportation Certification Test in AES. Five carriers are ready to begin filing their outbound manifests through the module on June 1: P&O Nedlloyd, Hapag-Lloyd, OOCL, Lykes Lines & TMM.
• Keep It To Yourself ........ as part of a proposal to update & expand its alternative dispute resolution (ADR) program, the U.S. Federal Maritime Commission has raised the cap on small complaint cases to US$50,000, from US$10,000.
• Being COSCO ........ as the U.S. Federal Maritime Commission has updated procedures China Ocean Shipping Co. must follow when it decides to reduce rates to either meet or exceed the filed rates of competing ocean common carriers on one day's notice. Since the agency's Automated Tariff & Filing Information System (ATFI) is no longer in use, COSCO will not longer have to request a Special Case Number for tariffs in which it wished to reduce rates. However, COSCO will be required to simultaneously publish the reduced tariff rate item in its own carrier automated tariff system, effective no less than 1 day later. The tariff rate item must be listed in a separate rule in carrier's automated tariff system. The change in procedures merely reflect the change from ATFI over to carrier automated tariff systems, the FMC said.
• Being OOCL ...... as the carrier claims a 1st in posting its tariff rates on line -- Intra-Asia only -- but it's a start.
  http://www.OOCL.com/tariffs_rates/default.htm
• Cho Yang Line: Picking Up The Pieces ........ as Cho Yang's U.S. headquarters in New York has been closed. Hanjin & Senator Lines are reducing capacity of their Asia/Pacific Northwest services & withdrawing 5 vessels from the trade. Hanjin said the PNX 1 & PNX 2 loops are being merged this month into 1 weekly service, so that vessels can be transferred to other services of the United Alliance to replace former Cho Yang vessels. Embattled carrier Cho Yang left the United Alliance last month. Hanjin & Senator had to step in to replace 7 Cho Yang ships of about 3,000 TEU capacity previously employed in alliance services. The PNX 1 loop employed 6 vessels & the PNX 2 service had 5, provided by Hanjin & by Senator. The merged PNX loop will utilize 6 ships with capacities ranging between 2,600 & 4,300 TEUs.  Meanwhile, Cho Yang has finally terminated its transatlantic services. The Korean carrier, which had a very small market share in the N. America/northern Europe trade, had served the transatlantic market as part of the United Alliance's AWE-PDM Asia/N. America/northern Europe.
• To P&O Or Not To P&O ......... as management of Royal Nedlloyd and Peninsular & Oriental Steam Navigation Co., the 50-50 parent companies of container shipping line P&O Nedlloyd "are in intensive talks" about a potential stock market listing of the company. Royal Nedlloyd had asked P&O to reach a decision on its proposal for a "reverse listing" of P&O Nedlloyd, but it acknowledged that no agreement has been reached. Under the proposed transaction, P&O Nedlloyd would become a public company by taking the stock exchange listing of Royal Nedlloyd. This would involve P&O transferring its 50% interest in P&O Nedlloyd to Royal Nedlloyd in exchange for Royal Nedlloyd shares. Royal Nedlloyd would then cease to exist & the new public entity would be known as P&O Nedlloyd. Follow that?
• Indian Bottleneck ......... as berthing constraints & choked inland cargo routes have led to a massive decline in cargo traffic at the country's oldest ports in Calcutta & Mumbai. Cargo traffic handled by Calcutta port declined 24.65 to 5.42 million tons in the 1st 9 months of 2000-01 as compared to 7.19 million tons handled in the same period the previous year. At Mumbai port, the decline was 11.32% to 20.75 million tons in April-Dec. 2000-01 as against 23.40 million tons handled in the corresponding period last year.
• Lagos Stalled ......... as administrative wrangle over cargo inspection has led to severe congestion at Nigeria's 2 main Lagos ports & is impacting the prices of imported goods. Scores of ships were waiting to berth on May 18. The quayside of the main container terminal at the Lagos Tin Can Island has been clogged for weeks. Terminals at the Apapa & Tincan Island ports overflow with containers, leaving no further space for incoming vessels. Root cause of the problem is a government decision in March to introduce inspection of goods at ports of loading, a move intended to curb graft at Nigerian ports. Nearly 40 vessels were counted outside the breakwaters at anchor, according to Lloyds. Air travelers report seeing scores of other vessels anchored up to 20 miles offshore.
• The New Price of Stall ......... as a result of severe congestion at Port of Chennai, the Chennai feeder operators have introduced a US$75 per TEU "congestion surcharge" on laden container movements between Chennai -- Colombo, Malaysia & Singapore. Member lines are passing this charge on to customers & therefore all eastbound & westbound freight rates are subject from May 15.
• File Your Qatar Application ........ as Gulf Agency Qatar (GAC) has obtained permission from the Ministry of Communications & Transport to operate as a fully fledged ship agent at Qatari ports -- thus bringing to an end the state monopoly on ship agency services that has been in force at the country's ports for more than 20 years.
• Welding At Dubai ...... as Customs, Dubai Ports Authority & Jebal Ali Free Zone have merged under one Authority named the "Public Corporation for Ports, Customs & Free Zone" (PCPCFZ), which will be run as a commercial concern & have financial & administrative independence. Expect greater scrutiny.
• No More Singles Club For Tankers........ as the Int'l Maritime Organization has announced firm agreement on the accelerated phase out of single hull tankers. The new form of the Marpol 13G regulations closely follow the framework proposed by the IMO last year, with so-called 'pre-Marpol' tankers from the 1970s of over 20,000 dwt, 30,000 dwt for products tankers, phased out by 2007 & similarly sized 'Marpol' tankers with segregated ballast tanks going by 2015. The latter will need to be monitored under a new condition assessment scheme after 2010 & the former likewise after 2005. Smaller tankers, between 5,000 & 20,000 dwt, will also be on their way out after 2015.
• Bulker Report ......... as 14 ships out of a total bulk carrier fleet of 5,513 were total losses last year, according to annual statistics of the Int'l Assn. of Dry Cargo Shipowners. The London-based Assn. reported 23 seafarers' lives were lost in 2000, the lowest figure during the 10-year period. Eighteen of the 23 lives were lost in 1 casualty, M/V Leader L, which sank following structural failure. Average age of bulkers lost at sea was 20.4 years, underlining fact that older bulk carriers are statistically most at risk. Structural failure remains a consistent & significant cause of loss, while the presence of heavy cargo feature in many of those losses.
• Big Ones ....... as M/V CMA CGM Balzac, the 1st of a series of 8 post-Panamax 6,500-TEU containerships ordered by CMA CGM, has entered the Asia/Europe service of the French shipping line in Shanghai. Vessel joined FAL service of the carrier between Asia & N. Europe. CMA CGM has signed long-term charter contracts for the CMA CGM Balzac & 3 sister vessels to be delivered in the course of the year from the Hanjin & Daewoo shipyards.
http://www.fmc.gov/Dockets/00-12%20Revocation.htm

• Unique Ones ......... as NYK group has developed a concept for a new multipurpose vessel capable of simultaneously transporting containerized, conventional & ro-ro cargo, 7 has applied for a patent on the new freighter. Construction will shortly begin at Shin Kurushima Dockyard Co. Ltd with the commission of 2 vessels next year. The concept is derived from 20 specially designed containerships built by NYK between 1995 & 1998, with a capacity of 900 TEU, 600 cars, & 10,000 tons of steel cargo loaded into holds. A prime feature of the new-concept is a rampway in the stern, which enables motor-driven cargo to load into the holds, allowing for effective use of space above the engines for ro-ro cargo. In particular, ro-ro can be handled separately even while containerized & conventional cargo are being handled above the holds by two 40-ton deck cranes. This means simultaneous handling of 3 different types of cargo is possible.
• Shippers Just Die For NYK Bookings ........ as Japan's largest shipping company, NYK, will offer a new funeral ash-scattering service in a bid to capitalize on demand fueled by the high cost of cemeteries in Japan. Although Japan's land prices fell for the 10th straight year in 2000, prices of graveyard plots have been soaring, particularly in big urban areas. As a result, many people want ashes of their remains or those of loved ones to be scattered in the ocean, particularly the S. Pacific, where many of Japan's elderly lost children or husbands during World War II. NYK hopes to cash in on this growing demand through a business tie-up with Hasegawa, Japan's largest chain store operator of Buddhist altars. Hasegawa will handle the funeral ceremony & a Nippon Yusen vessel will take the remains out to the ocean & scatter them. Good news -- there is no back haul, but this gives a new meaning to the Western concept of "going to the altar." No word on cost.
• I Christen Thee -- But Do You Have A Light? ....... as the world's largest ferry P&O's M/V Pride of Rotterdam that was named by Dutch queen Beatrix on May 2, appears to have been used to smuggle considerable quantities of cigarettes on its maiden voyage. During the voyage from home port Rotterdam to British Hull, most on board were guests of shipping company P&O North Sea Ferries. However, during a routine control at Hull, English customs officials detected more than two million illegal cigarettes in the cargo space of a Hungarian truck. The cigarette smuggling has severely embarrassed P&O North Sea Ferries, especially now, on its 1st official voyage to England.
• From The Producers of Our Favorite Movie: "Catch 22" ......... as vessels passing the Straits of Gibraltar enroute to countries in which it is difficult - if not impossible - to arrest ships (e.g., Russia) may benefit from an order decreed on May 2, 2001, by Judge Luz Maria Bonilla Vallejo Court No 6, Algeciras, Spain. It reads: "This order is to be communicated to the Maritime Captaincy of Algeciras that, when the vessel enters the port, they will notify the court of her arrival so that the arrest order may be implemented. This Order is also to be notified to the Maritima Guardia Civil, so that they may force the vessel to enter the port when she passes through the straits, & to the control tower at Tarifa in order that, when the vessel notifies them of her intention to pass through the straits, they will inform her of the arrest order & her obligation to enter the port of Algeciras." (from Maritime Advocate) Translation: When the Order comes, run like Hell!
• Say It Ain't So ........ as it is reported that a maritime arbitrator has reveled the following alleged transcript, of unattributed provenance: Taking his seat in chambers, the judge faced the opposing lawyers. "So," he said, "I have been presented, by both of you, with a bribe." Both lawyers squirmed uncomfortably. "You, attorney Leon, gave me $15,000. And you, attorney Campos, gave me $10,000." The judge reached into his pocket and pulled out a check. Handing it to Leon, he said, "Now then, I'm returning $5,000, and we are going to decide this case solely on its merits." (From The Maritime Advocate) Cute, but disgusting if true.
• FMC Revokes Licenses ........ as the U.S. Federal Maritime Commission has revoked OTI licenses for failing to maintain a valid bond: BWT Wholesale & Distribution, Inc., Elk Grove Village, Ill, Freight Connections Int'l Ltd., Homewood, Ill, Int'l Transport Services, d/b/a Intrans, Vancouver, Wash.: Inverfreight Inc., Miami Lakes, Fla.; and Jagro California Inc., Los Angeles. Two licenses were surrendered voluntarily: Paul Vernon Chadwick, Indian Trail, N.C.; & Cortina & Roth Inc., Miami.
• We'll Meet You For War Next Monday, After Lunch ........ as Sweden's navy is becoming an office-hours-only service. As part of a program to cut spending on the armed forces by nearly £50m, the Stockholm government has decided to moor all warships in port for the rest of the year & limit naval staff to 9 AM to 5 PM shifts. In yet another ground breaking program, starting next month doctors will be banned from golf on Tuesday afternoons, when babies are now licensed to be born. The march of science continues. It being unfortunately hard to tell, only the first part of this story is sadly true. No word yet from the Bad Guys Union Local 51 regarding these new schedule changes.
• This Month in U.S. Navy History: 

  - May 14, 1945: The carrier USS Enterprise (CV 6) is struck & seriously damaged by a kamikaze plane off the coast of Okinawa.

  - May 16, 1820: Frigate Congress sails from Hampton Roads, Va., to become the 1st U.S. naval vessel to visit China. The ship arrived in Dec.1820.

  - May 17, 1987: While on radar picket duty in Persian Gulf, USS Stark (FFG 31) hit by 2 Iraqi Exocet missiles 80 miles NE of Bahrain. 37 crew killed. Damage control efforts save ship despite fire hot enough to melt aluminum superstructure (1,800 degrees Fahrenheit) & a 16-degree list to port.

  - May 19, 1912: The cruiser USS Birmingham (CL 2) begins the 1st American ice patrol in the N. Atlantic. That patrol was needed made evident by sinking of RMS Titanic a month earlier.

  - May 24, 1939: 59 of USS Squalus' (SS 192) crew of 85 were rescued during the one time use of a rescue chamber designed by Vice Adm. Allan McCann. Sub sank the day before during a practice dive off the coast of Portsmouth, N.H.

  Visit the Naval Historical Center web site:
  http://www.history.navy.mil

We're sorry, but there were so many sinkings, explosions, pirate attacks, fires, cargo mishaps, battles on the water & other disasters at sea that we do not have room to print even the highlights this month. 100's of people lost their lives at sea this month!! 86 people were just shot & thrown overboard this very week!!

Our Daily Vessel Casualties & Pirate Activity Report is updated for you twice daily! You can also search ship wrecks & losses of the past in our extensive index.

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.