The Cargo Letter
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
28 August 2001
Good Monday Morning from our Observation Deck......
overlooking the officially designated "Cargo
City" area and....... Runway 25-Right, at Los Angeles
International Airport, voted "Best Cargo Airport in North America".
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Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel,
forwarder/broker attorneys at LAX.
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INDEX to The Cargo Letter:
OUR "A" Section: Trade, Financial & Inland News
1. Freight Forwarder Trade Briefs
2. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
3. Freight Forwarder World Air Briefs
OUR "C" Section: FF World Ocean News
4. FF World Ocean Briefs
5. The Cargo Letter Cargo Damage Dispatches
**Back By Popular Demand**
OUR "D" Section: FF in Cyberspace
OUR "E" Section: The Forwarder/Broker World
6. The Cargo Letter "Cyber Ports Of Call"
7. New U.S. Related Legal Cases
- Yankee Go Home .......... as Mexican National
Chamber of Cargo Transportation (Canacar) Chairman
Manual Gomez Garcia says Mexico should close its
borders to U.S. trucks, given the U.S.' failure to comply with rules
of NAFTA in order to give Mexican trucking companies a break. Canacar
has sent a request to the Mexican Senate to revoke Mexican
agreements with the U.S. regarding truck
transportation, reported Mexico City daily el Universal.
The U.S. government's refusal to open its borders to Mexican trucks
is based on pressure from various groups, including the Teamsters Union,
- Sold: JoC ......... as Commonwealth Business Media
Inc. said Aug. 20 said it would buy the Journal of
Commerce Group, which publishes JoC Week, formerly
known as the flagship daily Journal of Commerce -- oldest business newspaper
in the U.S. -- Traffic World, Air Cargo World, Florida Shipper, Gulf
Shipper, & Shipping Digest magazines, as well as database publishing
& Web sites. Founded in 1827 by inventor &
entrepreneur Samuel F.B. Morse, the Journal of
Commerce began as a New York shipping daily, chronicling one of the
world's busiest ports. Terms of acquisition were not disclosed.
- EU Tries Again ......... as the European Union
renewed its legal attack on 2 major U.S. tobacco firms
Aug. 6, seeking billions of dollars in compensation
over alleged cigarette smuggling to evade customs duties & taxes,
just a month after a U.S. judge threw out previous suit on technical grounds.
European Commission said it had filed a civil suit against Philip Morris
COs. Inc., maker of Marlboro, & entities of R.J. Reynolds Tobacco
Holdings Inc. in the U.S. District Court for the Eastern
District of New York on behalf of the European
Community & 10 EU member states.
- Lighter China Fare ......... as Taiwan has taken a
new step toward expanding its limited shipping links
with China, allowing Chinese goods arriving at
Kaohsiung to be taken to an airport for shipment off the island. The development is latest example of how the 2 rivals are
reducing trade barriers erected 52 years ago when they
separated amid civil war. Taiwan has allowed limited
direct shipping between the island & China since 1997. But the
cargo from China could not leave an offshore shipping center in the S. port in Kaohsiung & could not be unloaded on the island.
Under the new practice, cargo can be taken to the
airport in the capital, Taipei, for transshipment
overseas. But the cargo still cannot pass Taiwanese customs & cannot
be unloaded on the island. (see "Taiwan Shopping Ashore" in our
Phoenix Int'l South ........ as the privately owned
American Int'l forwarder/broker announced its latest
branch opening in Buenos Aires -- the company's 1st
office in Latin America. Exclusive agent agreements provide services
for other countries in the region. The Buenos Aires branch offers full
Int'l freight forwarding services, as well as customs brokerage & nationwide distribution throughout Argentina. The office is
managed by Fabian Casuccio.
Posting A New Name ......... as Dutch postal &
logistics company TNT Post Groep NV changed its name
to TPG NV on Aug. 6. The company struck the 'Post' in
its name. TNT Post has a postal tradition since 1799, but modern managers
did not like the 'post' part.
Port Security Bill Opposed ........... as U.S. Senate
Commerce, Science & Transportation committee
chairman Ernest F. Hollings, D-S.C. has held hearings
on the Port & Maritime Security Act (S. 1214), which would establish
a federal port security program. Aimed at attacking cargo theft, terrorism,
drug smuggling & other crimes, the legislation would establish a national
task force to coordinate security & safety programs. The bill requires
U.S. Coast Guard to establish local port security committees to help facilitate
& coordinate law enforcement at U.S. ports in cooperation with private
businesses engaged in port operations. The bill has met opposition from
the nation's port industry & customs brokers. Brokers are opposed to the
bill's "in-bond" requirement -- that importers must
file data with U.S. Customs for their in-bond
merchandise in the same level of detail as for a consumption
entry. The National Customs Brokers & Forwarders Assn. of America
said that "for those in the customs broker industry, it
is patently clear that no one will file this data
twice & most likely opt to clear all merchandise
at the 1st port of arrival. This is a consequence severely detrimental
to your port & your business."
Hard Duty - Soft Wood ............ as a 19.31%
countervailing duty on Canadian softwood lumber
imports has commenced. U.S. Customs will require cash
deposits or surety bonds in the amount of remedial duty for entries of
affected softwood lumber from Canada -- to remain in place
until the Commerce Dept. makes a final decision (due
by Dec. 8) in its investigation into whether Canada
subsidizes its lumber industry. Duty covers a variety of softwood
lumber products, such as flooring, lumber & siding. Does not include
trusses, furniture, pallets, I-joist beams, fence pickets,
garage doors, & door/window frames.
Attention Ag. Exporters ...... as the U.S. Dept. of
Agriculture has created an online system to provide
agricultural exporters with efficient access to
information about freight forwarders that specialize in the field. The
Directory of Freight Forwarders Serving Agricultural Shippers replaces a
static online version of the directory.
Mexico Limits Textile Ports ........... as it has
extended the effective date for modifying existing
regulations that specifically limit ports of entry
through which textile-related merchandise may be imported. Textiles
classified in all subheadings of chapters 50-63 of the Harmonized Tariff
System are only authorized to be released in these Mexico Customs ports:
Port of Ciudad Juarez; Port of Manzanillo; Port of Matamoros; Port of
Mexico; Port of Nuevo Laredo; & Port of Progreso. Due to
outcries from the trade community & other groups
effected by the short notice of the proposed change,
the effective date of the modifications has been extended through separate
correspondence by the Secretaria de Economia and Mexican Customs by either
10 or 30 days from the date of publication, or until August 10 or 30.
In addition, the Int'l Airport of Ciudad de Mexico, Port of
Hidalgo, Port of Colombia, Port of Veracruz, &
Port of Tijuana have been added as ports through which
textile-related merchandise may be imported. Also, companies participating
in the PITEX or maquila programs may be exempted from these modifications'
Selling The Best .......... as Arkansas Best Corp. has
sold its subsidiary, G.I. Trucking, for approximately
US$40M in cash to a company formed by senior
executives of G.I. & long time project partners Estes Express
Lines of Richmond, Va. Arkansas Best will retain ownership of 3 California
terminals & has agreed to lease them to G.I. for up to 4 years. G.I.
has the option to purchase the terminals for US$20M. G.I. Trucking is a
nonunion regional LTL carrier operating in the Western
- Roadway Express Buying ......... as it has agreed to
pay US$475M for jointly owned New Penn Motor Express
& Arnold Transportation trucking firms.
- Open Wide ......... as French Transport Minister
Jean-Claude Gayssot has confirmed that Mont Blanc
tunnel would reopen to traffic despite opposition from
Greens in the left-wing coalition government. The Alpine tunnel,
which provides a vital freight link between Italy & France under Europe's
highest mountain, was closed in 1999 following a fire which killed 39
people. Its operators hope to open the roadway this autumn.
Expensive German Roads ........ as of 2003 Germany
will implement a kilometer toll on trucks.
Depending on the number of kilometers driven & the CO2
emitted, truckers will have to pay between 0.14 & 0.19 euro per
Private AU Rails ......... as Australia is to
privatize 2 of its biggest rail freight businesses in
a sale expected to net up to $1B.
Back To The Well? .......... as Internet freight
tendering system Translogistica is in search of
additional funding, on top of its US$13M startup cash.
The project is a year behind schedule & still to go on-line.
Its has already lost partner Computer Sciences Corp. (CSC).
This company is involved in business-to-business net
markets such as e-Steel, CheMatch & VerticalNet.
CSC only comfirmed that it is not linked with Translogistica any longer.
INTTRA-ducing A Potential Winner.......... as the
provider of B2B ocean freight services & one of 3
online shipping "portals," signed forwarding
& logistics providers Danzas, Panalpina & Schenker AG to its network.
The 3 companies, which collectively transported 1.6 million TEUs in 2000,
join Kuehne & Nagel Int'l AG, the Swiss ocean freight forwarder, which
signed with INTTRA in July. The additions extend INTTRA's
edge with forwarder & logistics firms, compared to
competing portals GT Nexus & OOCL-owned CargoSmart.com.
Discarding At Descartes Systems .......... as the
Canadian based provider of global Internet logistics
solutions, will dismiss 70 people, 10% of its force,
due to losses in a weak market. "We regret that despite our best
efforts, the deterioration of global market conditions during this quarter
affected the sales of licenses &, consequently our financial performance,
more than we had anticipated," said the company. The company reported
a net loss of US$19.5M for the fiscal quarter ending July 31, compared
to a net loss of US$4.4M for the year-earlier period.
Shippers Unite! ......... as the Japan Shippers
Council will host a tripartite meeting of shippers
associations from Asia, Europe & North America,
scheduled for Sept. 10-12 in Yokohama. Participating associations include
European Shippers' Council; National Industrial Transportation League;
Japan Shippers' Council; Canadian Shippers' Council; Singapore National
Shippers' Council; Hong Kong Shippers' Council; Korean Shippers' Council;
Thai National Shippers' Council & Federation of ASEAN Shippers' Councils.
Doctor Defend Thyself ........... as 15 Chinese
doctors were arrested in Belgium Aug. 4 for trying to
smuggle 330 lb. of ivory from Africa where they had
worked for 2 years. The cargo consisted of 44 carved & 29 uncarved
elephant tusks worth US$881,100 -- the result of killing of
40 elephants. Animal skins were also in the
cargo, which was disguised as "personal effects"
& bound for an address in China when seized at Brussels airport.
Despite a decade-long Int'l ban on ivory trade, poaching to
obtain the prized white, enamel-like substance used
for jewels & ornaments has not ended. Under Belgian
law, the Chinese face up to 2 years & 3 months of jail.
Crazed Drivers & The Dangers of Canned Milk
........ as the State of California has sued Salt Lake
based Dick Simon Trucking, Inc. to pay for damage done
by a company driver who slammed his big rig into the side of the state
Capitol in Jan. The suit seeks US$13.5M damages & US$100M in punitive
damages. Truck driver Mike Bowers, who had a history of legal
& mental problems, rammed his rig into the
historic Capitol's south portico. The truck caught
fire, killing Bowers & leaving the building with fire, smoke & water
damage. Repairs are still underway. The suit says the company
was aware of Bowers' emotional problems & hired
him anyway. Bowers was transporting a load of canned
milk at the time of the crash.
- Bad Place To Swallow & Smuggle .......... as Saudi
Arabia beheaded a Nigerian man on Aug. 2 for smuggling
cocaine into the kingdom. The man had been sentenced to
death after being caught with a quantity of the drug hidden in
his stomach. The execution in the Red Sea port city of Jeddah brought to
at least 63 the number of people put to death in Saudi Arabia
this year. At least 121 people were executed in 2000.
- Sircam .......... as even the Japanese Coast Guard is
now infected by a new virus, carried by an attachment to
the following E-mail. We receive over 30 of these
messages each day -- from people we know -- don't open the attachment!
The virus sends itself to everyone in your address book -- and erases
1 of every 20 hard drives. "Hi! How are you?
I send you this file in order to have your advice
See you later. Thanks"
earnings of US$13.8M for year-earlier period -- losses narrowed, compared to
US$17.0M loss reported in 1st quarter.
Air Canada. DOWN with a net loss of US$108M or
US$0.90 per share & an operating loss of US$71M
for quarter ended June 30, 2001 -- as a result of 1st
half loss the carrier will cut 4,000 jobs, reduce its fleet size &
Atlas Air. DOWN with a 2nd quarter loss of US$49M,
including one-time charges of US$49.3M for
restructuring, impairment & account reserve charges. Total
operating revenues for 2nd quarter declined 22% to US$149M.
British Airways. UP with pre-tax profit of US$56.7M
(2000: loss of US$70.9M), for 3 months to June 30, 2001.
Operating profits were US$70.9M (2000: US$137M). Cargo
ton kilometers, fell by 15.5M.
Cathay Pacific. DOWN with a 395 drop in net profit to
US$167M during the 6 months ending June 30th 2001.
EGL, Inc. DOWN with loss of US$23.3M for 2nd quarter
ended June 30, due to the weak U.S. economy. Loss
compares with net income of US$15.0M for 2nd quarter
Expeditors Int'l of Washington. UP for 2nd quarter as
earnings rose to US$21.6M, up from US$18M for same
Hanjin. UP for 1st half 2001 -- revenue of US$1.9B,
up18.3% -- operating profit soared to US$180.1M, a 59.6%
increase. Container division had revenues of US$426.7M,
a 17.4% over 1st half of 2000.
Interpool, Inc. UP as net income for 2nd quarter up
13% to US$11.7M, or $0.41 per diluted share. Net income
for 2nd quarter 2001 included a US$0.3M after-tax gain,
equivalent to US$0.01 per diluted share, on retirement of US$11.3M
in senior unsecured notes. Revenue in 2nd quarter increased by 32% to
US$87.2M, from $66.1M in same period 2000. Operating income was US$34.7M
in the quarter versus US$28.0M for same period last year.
Interpool is corporate sponsor of The Cargo Letter
Library & Archives.
Kuehne & Nagel. UP with net income after minority
interest of US$48M in 1st half of 2001, surpassing
result of same period last year by 43.6%. Gross profit
rose by 10.9% to US$444M.
Lufthansa. DOWN 89% with a 1st-half net loss of 43
million euro compared to net profit of 460 million euros
in 1st half 2000, while revenue rose 13,7% to 7.8
Martinair. DOWN with loss of 29 million euro in 1st
half-year of 2001, compared to loss of 35 million euro
in 1st half 2000.
Maylasian Air ....... DOWN with a net loss of
US$108.9M in 1st quarter, tripple the loss for same
period last year.
Neptune Orient Lines (NOL) ....... preparing
shareholders for a big fall in profits, according to The
Straits Times in Singapore.
Orient Overseas (Int'l) Ltd., parent of carrier Orient
Overseas Container Line. UP with 1st-half after-tax
profit of US$49.1M, more than double US$24.2M for same
period 2000. Company has placed orders for four 7,700-TEU containerships,
& an ice-strengthened 4,100-TEU ship, to be delivered in 2003 &
Pacer Int'l. DOWN as net income decreased by US$4.5M
from US$6.9M in 2nd quarter of 2000 to $2.4M in 2nd
quarter of 2001 -- result of reduced operating income
& US$1.9M increase in interest expense due to borrowings for acquisitions.
P&O Nedlloyd Container Line. UP as world's
2nd-largest container line saw small improvement in
2nd-quarter operating profit, to US$46M, despite sharp slowdown
in world trade & pressure on rates.
Qantas. DOWN with full-year net profit of US$219.7M,
down US$101.9M or 19.7%.
Trailer Bridge Inc. (U.S. mainland/Puerto Rico shipping
line) DOWN with operating loss of US$4.1M & net
deficit of US$5.2M for 2nd quarter. John D. McCown, CEO
of Trailer Bridge, gained control of voting rights of the late Malcolm
McLean, founder & former majority stockholder. McLean owned 5.338 million
shares of Trailer Bridge common stock, approximately 54.6% at the time
of his death on May 25.
Wallenius Wilhelmsen Lines. (50-50 joint venture of
Wilh. Wilhelmsen ASA & Wallenius Lines) UP with 1st
half operating income of US$41.7M, compared to US$36.7M
for same period 2000.
Alpine Air Express Now Trading (OTCBB: ALPE )
........... as the 3rd largest regional air cargo
transport announced that shares of its common stock are
now trading on the over the counter under the symbol "ALPE" --
currently with 11 million shares outstanding.
- Airborne. DOWN with a 2nd quarter loss of US$6.4M, compared to net
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Written from wire stories, the Associated Press,
Reuters, Hong Kong Shipping News Lloyds & other world sources.