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

• The Fleet Expands ......... as the world's container fleet has just edged past 5 million TEU capacity & will grow to 6 million TEU before the end of 2002, according to H. Clarkson, the London shipbroker. It has taken almost 3 years to add the last 1 million TEU, with an orderbook of 1.7 million TEU now outstanding.
• United On The Waterfront ......... as the Int'l Longshoremen's Union (ILA) & the Int'l Longshore and Warehouse Union (ILWU) have joined the Int'l Brotherhood of Teamsters in a coalition to organize all North American port workers. Teamsters release: http://www.teamster.org/01convention/01conventionnews/crel_010628_6.htm
• Bangladesh Crush ........... as it's main Chittagong port resumed operations on July 7 after about 20,000 workers ended their 36-hour strike over plans by a U.S. company to build a private container terminal. Workers rushed to unload over 65 ships stranded by the strike with over 1.3 million tons cargo on board. The government said it agreed in principle with the Stevedoring Services of America (SSA) to allow SSA to build a US$500M private terminal to speed up cargo handling at Chittagong. But workers at Chittagong, the nation's main cargo part, said their campaign against it would continue -- so on July 9, Bangladesh's outgoing government called off the plan. Chittagong port handles 80% of Bangladesh's exports & imports. Protests against the terminal plan have paralyzed the port for 33 days since 1997. The proposed terminal would have had the capacity to handle 800,000 containers annually while the Chittagong port currently handles over 400,000 containers per year. Sorry SSA.
• U.S. Takes A Hand ........ as a U.S. Coast Guard team is training Southeast Asian maritime forces methods to combat piracy as the problem continues to dramatically increase in the region. The U.S. anti-piracy team, based in Alameda, Calif., is currently working with Singapore's navy & Coast Guard. It recently held similar training sessions with navies & coast guards in Indonesia, the Philippines & Thailand. More sessions are planned in Malaysia & Brunei.
• Malaysian Marine Police Battle Pirates ...... as it has ordered another 10 patrol boats at a cost of US$26M to enhance its anti-pirate enforcement capability. The 25m fast craft are in final stages of construction & will deliver soon to supplement 20 jet-propelled fast strike craft acquired last year. Spokesman for Malaysian Marine Police said force planned to acquire further boats over next 2 years.
• Going Up ......... as the Trans-Atlantic Conference Agreement will raise eastbound transatlantic rates, effective Sept. 1. Rates via Atlantic & U.S. Gulf Coast ports will increase by US$120 per 20-foot container, US$150 per 40-footer, US$300 per 40-foot temperature controlled container and $7.50 per freight ton -- for shipments via U.S. Pacific Coast ports, increases are US$240 per TEU, US$300 per FEU, US$300 per temperature controlled FEU & US$15 per freight ton. The Canadian Westbound Conferences will raise westbound rates from northern Europe to Canada on Oct. 1 -- US$60 per 20-foot container & US$100 per 40-foot box.
• Threat To U.S. Fleet? ........... as a coalition of U.S.-flag shipping lines, labor unions & supporting industries warns that a new rule imposed by the U.S. Customs Service will threaten the competitive position of the U.S. merchant marine, the jobs of U.S. seafarers, the businesses of domestic marine suppliers and the nation's security. The rule makes a sharp break from previous policy by subjecting supplies & parts used in routine repairs of vessels while sailing on the high seas to a 50% ad valorem duty. For some 65 years, the duty was applied only to shore-side repairs performed in non-U.S. shipyards. The rule would affect some 147 deep-sea foreign trade vessels, & is projected to cost the industry a minimum of US$33.8M per year, according Gloria Cataneo Tosi, president of the American Maritime Congress. On a per-vessel basis, the minimum cost would be a little more than US$230,000 per deep-sea operating vessel, Tosi said. If implemented, the rule could force 30% of the remaining U.S. fleet to abandon the U.S. flag, she said.
• LCL By E-Mail ......... as Conterm Consolidation Services, a NVOCC subsidiary of NACA Logistics Group, has started offering confirmed onboard notifications to customers with less-than-containerload cargo leaving North America. The service, which is part of the NVO's E-docs program, was launched last year to deliver documentation via e-mail. Conterm has set its new onboard notification service as a "one-step" process so that notifications for every shipment loaded in a particular container are automatically sent to the e-mail address that is registered to receive booking confirmations.
• Less Int'l Shipping ......... as Int'l Shipholding Corp., amidst reporting 2nd-quarter losses of US$57.4M & 1st-half 2001 losses of US$68.2M, said it plans to dispose of its LASH services, its Cape-size bulk carrier & special purpose barges. Int'l Shipholding owns & operates the world's largest barge-carrying LASH vessel fleets, under subsidiaries Waterman Steamship, Central Gulf Lines & Forest Lines. By 1998, the corporation had assembled a LASH fleet of 12 vessels. The LASH fleet is showing its age. Int'l Shipholding has started to phase out its oldest LASH vessels & is seeking new specialized ocean cargo transport business. Int'l Shipholding recently disposed of 4 LASH vessels, that had reached the end of their charters, to the U.S. Navy & sold another LASH vessel last year. The corporation still operates a LASH fleet of 7 vessels under Waterman Steamship & Forest Lines in their liner services. "Assets held for disposal" by the company are:

  * Waterman Steamship Corp., the U.S.-flag LASH (lighter aboard ship) service between the U.S. Gulf & Atlantic coasts & the Mideast, East Africa, the India & Southeast Asia -- the subsidiary has eliminated 45 staff positions from its New Orleans & New York offices.

  * Forest Lines, a transatlantic LASH service.

  * The Cape-size bulk carrier & purpose-built barges no longer required for current operations.

  Waterman 7 Forest Line will continue to operate as separate units under the current management while Int'l Shipholding decides how to dispose of the units.

• Merger of P&O Nedlloyd & NOL? .......... as speculation is growing that Neptune Orient Lines (owner of APL Lines) in Singapore is looking to merge with P&O Nedlloyd. NOL has strongly denied the rumors.
• Walking The Plank ......... as Cho Yang Shipping, the debt-laden Korean shipping line, has dismissed the 19 members of its board of directors as part of the handover of the company to a receiver appointed by the court. Cho Yang filed for bankruptcy proceedings at the end of May and aims to present a reorganization plan.
• Arresting Abu Dhabi ......... as the court of Gibraltar's admiralty marshal has arrested seven 1,388-TEU containerships owned by Abu Dhabi Container Line, the United Arab Emirates based ship owner. The German bank that has a mortgage on the ships, confirmed that it requested their arrest. Abu Dhabi Container Line is a joint venture established in 1999 between the former owners of Norasia & United Arab Emirates government entities. The 7 vessels arrested in Gibraltar are part of a series of 10 that were owned by the Swiss shipping line Norasia, until they were transferred to Abu Dhabi Container Line. Norasia Container Lines, now owned by Chile's Compania Sud Americana de Vapores, is not affected by the vessel arrests. Six of the vessels owned by Abu Dhabi Container Line had been operated by Express Container Service, a German company, until about the end of May. Meanwhile, Express Container Service suspended its weekly link between Asia & the Mediterranean at the end of May -- it now operates no ships.
• APL In The Ditch ............ as it has established APL de Panama, SA, which will operate its own full-service offices in the strategic shipping market & operational hub of Panama. APL has previously been represented in Panama by independent maritime agencies. APL's offices will be located in Panama City and at Colon's Manzanillo Int'l Terminal, adjacent to the Colon Free Zone, which is the largest free trade zone in the western hemisphere.
• ANZDL Indemnity .......... as Australia-New Zealand Direct Line has upgraded its online cargo insurance service, allowing shippers to receive their insurance certificates at the same time as their bills of lading. Known as ANZCover, the service was started in April through the carrier's Web site.
  http://www.myanzdl.com
• Just Visiting ......... as China Ocean Shipping Co. & Malaysia Int'l Shipping Corp. have joined CargoSmart, the Internet shipping portal launched by Hong Kong-based Orient Overseas Container Line last Oct. Both Asian carriers have joined the container shipping Web portal as users, but have declined CargoSmart's offer to invest in the venture as shareholders.
• Thirty Year Tow Ends ......... as Matson Navigation has approved the sale of the assets of its subsidiary, Matson Services Company, Inc., to Hawaiian Tug & Barge (HTB), effective July 19. Primary components of the sale are the 2 Matson Services' tugs, Joe Sevier & Maoi, which provide harbor assistance at Kahului, Maui & Hilo, Hawaii respectively. Matson Services was established in 1969 in order to improve docking services for Matson vessels at Neighbor Island ports.
• FMC License Revocations ........ as these OTIs lost their licenses for failure to maintain a valid bond: Aimar USA Inc., Medley, FL.; Ameripak Services Inc., Miami; APC World Freight Services, So. Francisco, CA.; Cross Trans Service USA Inc., Elk Grove Village, Ill.; D.S.C.V. Transport Inc., Lorton, VA; Hanover Navigation Ltd., San Francisco; Itochu Express America Inc., NY; Pacon Express Inc., Carson, CA.; RMG Int'l Inc., Houston; and J&M Shipping, Brea, CA.
• Super Rack ........... as a new style of flat rack container called Super Rack, developed by Super Corp. - a Korean logistics company -- in cooperation with Clive Smith Associates Ltd, is claimed to be able to maximize the use of space for oversized cargo. Super Rack is a height-adjustable flat rack container, with extendable corner posts that reaches 4.1 meters - 1.5 meters higher than a normal flat rack container. Normally, cargo that exceeds 8.5 meters will be stowed in a separate place on the vessel & requires special equipment to handle. This can cause a certain waste of space because of stacking problems, a waste that the shipper may have to pay for. Super Corp. claims that Super Rack can solve the problems arising from slightly higher than normal cargo in terms of handling difficulties & from extra charges by allowing for oversized cargo to be stored along with the normal container cargo in an adjustable container.
• Nose Calimari ......... as a federal judge ruled July 6 that authorities can destroy 9 tons of squid & most of 13 tons of cocaine being preserved as evidence in a drug trial. Coast Guard crewmen seized the cargo in April from a Belize-flagged fishing boat about 1,500 miles S. of San Diego. Defense lawyers argued the squid was evidence that the crew was fishing, not smuggling drugs. Prosecutors said it was unnecessary to spend more than US$40,000 a month to store the cocaine & frozen squid. Since the seizure, the government has spent about US$4,000 to preserve the squid & US$90,000 for the cocaine, which needed special storage because it was contaminated with diesel fuel. All but 515 pounds of the cocaine can now be destroyed. The squid & cocaine will be preserved until at least July 30 to allow defense examination. The court delayed a ruling on whether a ton of shark & mahi-mahi seized from the boat should be preserved.
• Floating Cargo Vessel Graveyard ......... as 8 deserted Russian ships are stranded on reefs in Japanese territorial waters while local authorities wait for their owners to pay funds in the near future for their salvage & scrapping. Talks are being conducted with some results says the Japanese Marine Safety Agency which records shipwrecks off the country's coasts. Two deserted & submerged Russian ships were recorded near the city of Nemuro & the Hanasaki port on Hokkaido Island -- areas directly overlook the South Kuriles & are actively engaged in fishing trade with Russia. Another 4 dry-cargo ships are stranded on reefs in S. Japan: off the Urasoe port on Okinawa Island, off Iriomoto Island, off Tanegashima Island & off Amami-Oshima Island. Japanese authorities are trying to contact owners of the deserted vessels to exact funds from them, through court, for scrapping. The situation is aggravated by the fact that many of the ships were registered by false firms, existing only on paper. Other Russian owners stubbornly refuse to reply to requests. However, Japanese regard with optimism a recent ruling by the court of arbitration in Yuzhno-Sakhalinsk, which obliged a local company to pay US$280,000 for salvaging the Zolotaya Zvezda crab carrier which sank in 1997 near the Wakkanai port on Hokkaido Island.
• Kiwi Lemon Sold To Spain ........ as a New Zealand navy supply ship branded a "lemon" because it rolled so heavily it made servicemen sick has found its natural calling -- as a citrus fruit freighter in the Mediterranean. HMNZS Charles Upham was bought by the New Zealand government in 1994 for NZ$14 million (US$5.7M) & another NZ$7 million was spent on modifications. But in sea trials the ship, named after New Zealand's most  decorated World War II soldier, rolled so alarmingly that by 1997, the New Zealand government leased it out to Spanish citrus fruit shipping company, Contenemar SA. Contenemar has now agreed to buy the vessel at a "stiff discount" for NZ$8.6 million -- perhaps to mix fruit cocktail in transit.
• Heart Pounding Action ........ as the Mongolian Navy's diesel-powered Sukhbaatar III, is ready to pursue enemy vessels across Lake Hovsgol on the Siberian border, at a speed of up to 22km an hour. Sukhbaatar III is the only vessel in the navy of Mongolia, world’s largest landlocked country. Named after Damdiny Sukhbaatar, the Lenin of Mongolia, it has been on patrol duty since 1938 without ever encountering a foe. Lake Hovsgol, which holds 2% of the worlds fresh water, is about 1,000 miles from the sea. The ship was transported on 100 trucks across the grassland & assembled from parts on the edge of the lake. Its two predecessors, the Sukhbaatar I & II, sank in shallow water not far from the docks in the town of Hatgal on the S. tip of the lake. According to the "Comprehensive History of the Mongolian Navy", published by the Government in 1967 on a single, folded sheet of paper, both were peacefully retired. Sukhbaatar III is often seen towing bulk barges to help earn money for it's "operations." n

We're 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. Many lives were lost at sea this month!! Indeed -- two sister cruise ships sink in the same location 14 days apart. Coincidence? Plus -- Bold attack on Sri Lanka Int'l Airport! -- Engine of U.S.S. Monitor raised!

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.