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

• Malcolm P. McLean .......... as the founder of Sea-Land Services & known as "The Father of containerization", died Friday, May 25 from complications related to heart failure. He was 87. In 1955 McLean purchased Pan Atlantic Steamship and in 1956 the M/V IDEAL X, a converted World War II tanker sailed for Port Newark , NJ to Houston, TX, launching containerization. He soon changed the name of the company to Sea-Land Service & expanded the company and the concept of containerization globally, becoming the largest liner operator in the world. Last May, McLean was recognized by the Int'l Maritime Hall of Fame as "Man of the Century".
• Cho Yang Sinks ......... as the troubled South Korean carrier has filed for court receivership amid a blizzard of debts. The troubled operator had already been dropped by its Grand Alliance partners as it struggled to maintain operations despite mounting difficulties. The 30 year-old company has redelivered some of its charter tonnage early as part of its move to keep going. Under receivership, Cho Yang could continue to operate under court protection so long as it began an in-depth financial restructuring & rescue package. The company is currently lumbered with some US$300M in debts despite massive fire-sales of its assets over the past few years. The move to file for receivership before Korean courts followed a string of creditors’ calls for payment. The company mentioned a timetable for repayment of overseas claims "on per capital basis" by 2003. Cho Yang said it can also raise more than US$23M by selling real estate assets & its affiliated company, Dongseoul Country Club. Cho Yang says its future business plan is to operate 3 intra-Asia container services, several Asia/Europe or Asia/Mediterranean services & one transpacific weekly service. Transpacific operation, scheduled to start next Jan., would employ 6 1,800-TEU vessels. Cho Yang would provide 3 of 6 vessels & an unknown partner would provide the balance.
• Zim Casts Off ......... as the State of Israel has decided to end its role as a passive partial owner of Zim Israel Navigation Co., an ocean container carrier. The government issued a tender to sell its 48.6% of Zim, shared in a partnership with Israel Corp. a holding company with semiconductor, chemical, & petroleum subsidiaries,
• Back To The Flag .......... as APL, the container shipping unit of NOL Group, said it has reached agreement to acquire American Automar, the ship-owning company providing U.S.-flag services to the U.S. Dept. of Defense & other government agencies. APL will acquire the privately held Automar in a US$50M, all-cash transaction, which includes about US$15M in debt. Oakland, Calif.-based APL will allow Bethesda, Md.-based American Automar to continue to operate as a separate company under its current name & management. Meanwhile, NOL has launched a seven-year, US$300M bond issue to support the expansion.
• Running East ........ as an increase in trade with Asia has helped drive overall general cargo volumes in the Port of New York & New Jersey up by more than 13% in the 1st quarter of 2001. Meanwhile, however, Port of Los Angeles has already recorded a 15.3% increase in container traffic over last year -- with one month to go on it's fiscal year.
• LA Squeezed ........... as U.S. ports face productivity problems due to growing port congestion. California has acquired more land -- knowing that the land will run out. Port congestion could urge shippers to use other modes of transportation 'unless immediate steps are taken to improve efficiency' executives told a transportation seminar in Long Beach last week. They added that the technology is available to improve the ports' performance. The Los Angeles - Long Beach ports handle over 9.5 million TEUs last year. Surveys show that the throughput of cargo could increase to 32 million TEUs by 2020. These have to be accommodated, but even a small landfill expansion project takes at least 6 years to complete. The Californian ports also need an expansion of the Long Beach Freeway, the main truck artery to the port complex, but the process will take at least 10 years. --- Where's all the new freight coming from? It is estimated that Asian ports will increase their total annual container throughput from about 107 million TEUs in 2000 to between 254 million & 306 million TEUs in 2015, according to a report by Ocean Shipping Consultants.
• Navy EP-3C Coming Home With The Russians ........ as a spokesman for Polyot, a Russian air cargo carrier, says his company had won the contract, which was announced early this month by the U.S. Defense Dept. A Russian Antonov 124-100 will take the EP-3 spy plane from the military airfield on the Chinese island of Hainan, but no date for the operation has been announced. Last month we told you that Antonov Airlines alleged to have also received an indirect inquiry from the U.S. government about possible charter of an Antonov An-124-100 freighter to remove the U.S. Navy plane. The An-124-100 can carry up to 120 tons & is the largest freighter in commercial use.
• Door Open A Crack ......... as In a major conciliatory gesture, South Korea will open a key waterway to North Korean commercial ships if they seek permission in advance to pass through it. The decision came hours after the Seoul government allowed 3 North Korean commercial cargo vessels to sail out of the narrow channel between South Korea's mainland & its southernmost island of Jeju after violating those South Korean territorial waters for more than hours over the weekend. of June 2. The gesture reflects reduced tension on the divided Korean Peninsula following a historic inter-Korea summit a year ago.
• Nigeria Tightens ......... as Asia/West Africa Westbound Rate Agreement (AWARA) have been experiencing severe delays at Nigerian ports because of a customs inspection program on imported containers. This led to a Nigerian port congestion surcharge which was implemented on June 20 at the rate of US$290 per TEU 7 US$580 per FEU. Member lines of the AWARA are Delmas, Gold Star Line, Maersk Sealand, Mitsui OSK & P&O Nedlloyd.
• P&O Stena Line Exempt ........ as the European Commission granted it a 6 year exemption from antitrust provisions, the longest possible exemption the commission could give. P&O Stena Line operates 7 multipurpose roll-on/roll-off ferries on the Dover/Calais route that provide 35 round trips a day. In addition the carrier has 3 multipurpose ferries on the Dover/Zeebrugge route.
• Controlling The Atlantic ........ as family owned Grimaldi Group, the Italian shipping, logistics & transport company, bought a further 4.37% of Atlantic Container Line, while earlier it already bought 45% of ACL. Grimaldi must make an offer for the remaining shares of ACL, which has a market value of about US$140M. Read the JOC article: http://www.joc.com/enews/20010626/sections/ocean/w97844.shtml
• Ancient Trade Retied .......... as Syria & Greece have agreed on promoting cooperation in marine cargo & passenger transport. The accord calls for cooperation between coast guards to combat illegal shipping such as trafficking in drugs & migrants -- and agreed to reopen shipping routes between Syrian & Greek ports which canceled in recent years due to a slowdown in commerce. They aim to expand cargo volume between the states to one million tons per year from an estimated 200,000 to 300,000 tons currently.
• Unscheduled Crowley "Port Call" .......... as U.S. Customs agents this month ended a drug smuggling scheme near the Port of Baltimore, which involved several crew of containership, M/V Crowley Lion -- who had recruited other crew to import cocaine to the U.S. Customs agents observed a small vessel S. of the Key Bridge in Chesapeake Bay. Agents also saw Crowley Lion depart South Locust Point Marine Terminal. When the vessel passed under the bridge, 2 crew on the Crowley Lion dropped duffel bags of cocaine, valued at US$2.6M, into the water, which were picked up by 2 men in the small boat. Customs arrested the men at a nearby marina.
• Not Inclined To Continue Tradition ........ as a champagne bottle clanging against the bow, streamers & patriotic music will filling the air -- a century-old shipyard tradition ended this month at Bath Iron Works. USS Mason, a Navy destroyer, was the last ship launched down an inclined path at the Bath shipyard. Competitive pressures forced the yard to stop building warships on inclined ways, or paths, that slope into the Kennebec River. Thanks to a $240M modernization, the yard now will build ships on a flat surface, helping to shave weeks off the production schedule & making the yard more competitive. Instead of sliding into the river, which takes 30 seconds, new warships will be transferred to a dry dock -- to be filled with water so the ship will float away in a process that will take hours.
• Marine Infomerger .......... as Maritime Information Publishing Group of Lloyd's Register will merge with Fairplay Publications Ltd. The new joint company, Lloyd's Register - Fairplay Ltd., will commence on July 1, 2001. With a staff of over 130 & worldwide customer base of over 15,000, Lloyd's Register - Fairplay will be the world's largest independent supplier of maritime information services
• It's About Time ........ as Vanuatu & Marshall Islands vessel registries have signed an agreement to exchange historical information on vessels which leave either flag. In addition, the receiving registry will not accept a ship without a full history. Vanuatu Maritime Services Ltd. said: "Vanuatu has been working towards an agreement of this kind for several years. Exchange of information will discourage owners with an unsatisfactory record from registering vessels with a less than satisfactory history." Tidbit: The classification society the Korean Register of Shipping saw it's number of ships rise to 2,074 aggregating 19.8m gt in 2000.
• No More Singles Club ......... as the European Union has passed legislation to ban all single-hull oil tankers from its waters by 2015, in line with an Int'l agreement to phase-out the ships, considered an environmental hazard.
• Keeping Them Aboard ........ as Det Norske Veritas (DNV) is developing a surveillance system to help ship masters to avoid the loss of containers. Called "Active Operator Guidance", it uses data on ship motions & wave loads predicted by the analysis tool WASIM, and checks that limits of hull loading, impact pressure, water on deck, motions & accelerations are not exceeded. Loss of containers can be a considerable financial liability to carriers, while drifting containers are a hazard to international Shipping. In 1998 M/V APL China lost more than 300 containers -- insurance claims represented more than 50% the value of the vessel. See the dramatic photos of M/V APL China at our Gallery of Transport Loss web feature. 
  https://cargolaw.com/gallery.html
• U-Boat Surfaces .......... as wreckage of a sunken World War II German submarine has been discovered by 5,000 feet below the surface of the Gulf of Mexico BP & Shell Oil Co., which had been surveying the gulf floor for an oil pipeline, announced discovery on June 8 of the U-166, which sank in 1942 after it destroyed the American passenger-freighter S/S Robert E. Lee -- 45 miles from the mouth of the Mississippi River. The 375-foot S/S Robert E. Lee - a private vessel commissioned by the Navy - was loaded with 268 passengers, many of them victims of prior U-boat attacks who were coming back to the U.S. from Trinidad. When a torpedo hit the ship, Coast Guard patrol PC-566, about a half-mile in front of the Lee, turned back immediately & dropped 6 depth charges. Navy vessels rescued nearly everyone, but 15 crew & 10 passengers died on the Robert E. Lee. Until now historians thought that U-166 had survived that attack & was sunk 2 days later -- about 120 miles away.
• Where? ......... as a devastating storm has wreaked havoc on the world's most remote inhabited island & left the British colony without power for a week. Winds of 120 mph destroyed the hospital & community center and damaged homes on Tristan da Cunha - a South Atlantic island which lies 1,500 miles off the coast of South Africa. None of the island's 300 population was seriously injured in the May 23 storm, but a large number of cattle died. The island also lost its satellite phone & the roof was blown off the radio station. Britain was offering a US$105,000 emergency aid package. The island's economy is based mostly on fishing, selling postage stamps and occasional tourism, but a supply ship does visit once a year. A British colony since 1834, its links with Britain date back to 1658 when the British East India Company won a charter to colonize & fortify. In 1961, the entire population of Tristan da Cunha was evacuated to Britain after a volcanic eruption. Most residents eventually chose to return.

We're sorry, but there were so many sinkings, explosions, pirate attacks, fires, cargo mishaps & other disasters at sea that we do not have room to print even the highlights this month -- even a historic navy attack against pirates & rescue of a civilian crew being held hostage!

SPECIAL NOTE: The Cargo Letter has two new photo features: Meals: Ready To Explode - Navy container barbecue at Guam! Great New Photos! M/V Modern Drive - Incredible Story! Incredible Photos!  Please view these dramatic pictures at our special "Gallery of Cargo Loss" website feature.
https://cargolaw.com/gallery.html

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.