_{The Cargo Letter}

THE CARGO LETTER [369]
Air & Ocean Logistics - Customs Broker News
21 September 2001

It's Friday Morning on our Observation Deck...... overlooking the officially designated "Cargo City" area and....... Runway 25-Right, at Los Angeles International Airport. Only days ago we were able to re-enter the LAX security zone & return to our desks -- witnessing the stark sight of 147 parked commercial aircraft. The world's No. 1 cargo port & No. 3 passenger terminal -- had paused -- but was ready to continue its important work. The Cargo Letter will not attempt to relate major stories, best covered by others. But we have tried to gather information for you concerning the impact of Sept. 11 events upon our cargo transport industry. We thank our many reader contributions & welcome continuing information to be posted at the Web site. If there has been no response to your contribution or photo -- we are running quite behind. This edition was rushed out & may not be our best writing -- but it is our contribution to a heartfelt effort.

Throughout this awakening of the true American Spirit we have attempted to post noteworthy releases about our industry missing & dead. We are still reviewing many of your messages & photos for posting soon. Please visit & contribute at our "Daily Vessel Casualties" Web feature: https://cargolaw.com/presentations_casualties.html

GOD BLESS AMERICA

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Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel, forwarder/broker attorneys at LAX.

INDEX to The Cargo Letter:

OUR Top Story: American Rises

American Rises ............ as we emerge from a dark hour, into the light of America's bright future, here are additional details of Sept. 11 effects upon our trade & transport industry:

Details of The Doomed Sept. 11 Flights:
_American Airlines Flight 11: A Boeing 767 en route from Boston to Los Angeles. Carrying 81 passengers, 9 flight attendants & 2 pilots. Crashed into a tower of New York's World Trade Center about 8:45 a.m. EDT.
_United Airlines Flight 175: A Boeing 767 bound from Boston to Los Angeles. Carrying 56 passengers, 2 pilots & 7 flight attendants. Crashed into the other tower of the World Trade Center shortly after 9 a.m.
_American Airlines Flight 77: A Boeing 757 en route from Dulles Airport near Washington to Los Angeles. Carrying 58 passengers, 4 flight attendants & 2 pilots. Crashed into the Pentagon about 9:40 a.m.
_United Airlines Flight 93: A Boeing 757 en route from Newark, N.J., to San Francisco. Carrying 38 passengers, 2 pilots & 5 flight attendants. Crashed S.E. of Pittsburgh around 10 a.m. after acts of American passenger heroism overcame the terrorists and likely spared The White House and untold numbers of casualties on the ground.

TONIGHT IN AMERICA: At the World Trade Center 291 dead ... 6291 injured ... 6333 missing. At the Pentagon 118 dead ... 71 missing. .... 64,000 tons of debris removed from WTC thus far. NEVER AGAIN.

"Justice Will Be Done" - Pres. George Bush -- Sept. 20, 2001

AIR MODE
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During the emergency more than 4,000 of the world's 12,000 commercial airliners were grounded. The U.S. market is worth about US$1B per day, according to IATA. Before Sept. 11, there were roughly 40,000 departures of aircraft a day in scheduled air service in the U.S. The U.S. National Airspace System reopened at 11am EDT/1500 GMT Sept. 13 -- mail & cargo temporarily banned from U.S. passenger flights. Air cargo represents about 40% of world trade by value. Trans-Atlantic freight represented 17.9% of global traffic & Trans-Pacific airfreight 14.6%.
Boston's Logan Int'l & Newark Int'l airports were last to reopen on 15 Sept. -- but Reagan National at Washington. D.C. is closed indefinitely due to proximity to Pentagon. Reduced passenger & cargo schedules are operating, but civil aviation under visual flight rules remains restricted. News & traffic helicopters, sightseeing, flight schools & blimps remain grounded. Airspace near all pro & college sporting events restricted. In its current situation, LAX is loosing approx. US$1M per day in lost revenue & US$800,000 per day increased security costs.
Airborne, Atlas Air, BAX Global, Emery, FedEx & UPS resumed on Sept. 13 evening. Lufthansa Cargo restarted freighter flights to the U.S. on Sept. 15, but no belly cargo on passenger flights for security reasons at the time. Icelandair Cargo B-757 freighter left JFK Int'l Airport on Sept. 13 afternoon as one of the 1st eastbound transatlantic commercial flights. An Alitalia flight was 1st off at LAX. Aircraft also slowly returned to Canadian skies on Sept. 13.
Airlines leaving the U.S. need to get approval from the FAA on a case-by-case basis -- taking longer to depart, along with heightened security measures.
U.S. Postal Service obtained additional space on Amtrak trains, using its own fleet of 210,000 vehicles & contracting for additional space with 7,000 trucking companies. FAA was continuing to ban transport of mail & cargo on most passenger planes, preventing Post Office from sending mail via airlines -- which normally handle between 20% & 25% of daily total. Alaska Airlines, which carries about 550,000 pounds of mail a day to Alaska was exempted from the ban. Special arrangements were also made to fly mail to Hawaii & Puerto Rico. Overall costs to the U.S. Postal Service from attacks at US$50M, half of which will be needed for repairs to Church Street postal station in lower Manhattan.
U.S. Post Office began accepting mail from other nations Sept. 16, ending ban on foreign packages & letters. Expect delays of up to 3 days on most foreign mail.
On Sept. 18, the U.S. Federal Aviation Administration lifted restrictions in place since Sept. 11 that prohibited carriage of cargo & mail on passenger aircraft. FAA said that "mail & freight now permitted on passenger flights, but subject to heightened security procedures," and asks that inquiries be directed to the U.S. Postal Service.
U.S. airlines are seeking up to US$24B in governmental aid to stem financial losses raked up during the aviation shutdown. In a scheduled meeting with the U.S. Transportation Secretary Norman Mineta, & leading airline executives asked for a range of aid measures, including waivers on certain cargo taxes & suspension of a US$0.044 per gallon tax on aviation fuel. At our press time, it appears that Congress is disposed to grant a US$15B rescue plan.
Midway Airlines suspended all flight operations on Sept. 13, preferring to go out of business rather than continue restructuring attempts in the wake of U.S. terrorist attacks. Company said action taken in "the recognition that following the recent terrorist attacks demand for air transportation is expected to decline sharply." Approximately 1,700 Midway employees have lost their jobs. Several other U.S. carriers threaten Chapter 11 Bankruptcy protection. Belgium's Sabena may not make it to the end of the year.
Industry Cuts:American Airlines will reduce force by about 20,000 employees. >> America West to cut 2,000 jobs. >> Continental Airlines will reduce its long-term flight schedule by 20%, resulting in furlough of approximately 12,000 employees & will be ceasing flights to 10 destinations worldwide -- including London Stansted, Dusseldorf in Germany, Houston-Tyler, Abilene, Waco, San Angelo & Houston/Hobby in Texas, Daytona Beach & Melbourne in Florida, & Atlantic City in New Jersey. Continental has also missed US$70M in scheduled payments due. >> Northwest Airlines reducing frequencies by 20%, eliminating 11 Int'l destinations & will announce layoffs next week. >> US Airways to reduce by 24%. & will be axing 11,000 jobs >> United will lay off about 20,000 employees. >> Virgin Air will cut 1200 positions. >> Boeing will reduce commercial aircraft workers by as much as 30,000 in the next year. >> At our press time -- more than122,000 workers will be laid off in this business sector -- more to come. One the other hand, there has been a huge surge in the U.S. jet charter industry for obvious reason of presumed security.

Finance directors of leading carriers meeting in Bangkok in the Finance Committee of the Int'l Air Transport Association estimated on Sept. 14 that net losses for Int'l scheduled traffic & domestic U.S. traffic could easily exceed US$10B in 2001 alone. Scandinavian Airline Systems (SAS) stated that its income now expected to be at least 25% lower than in 2000.

FAA will now place Air Marshals (apparently the name has now changed from our former "U.S. Sky Marshals" of the 1960's) aboard some U.S. flights. Britain is considering stringent new security measures on aircraft including on-board security guards & sealed cockpits for pilots -- just like El Al Air has always done. [NOTE: There has been a surge in El Al seat demand since Sept. 11 to various world destinations -- the public knows which airline is truly safe.] Starting Sept. 19, the FAA is recruiting Federal Air Marshals -- job listing will be available on their Web site. www.jobs.faa.gov.

Federal Aviation Administration's Cargo Security Program -- "We continue to find weaknesses in FAA's policy for allowing cargo on passenger aircraft," said Kenneth M. Mead, DOT's inspector general, in a statement before a rare joint Senate-House hearing of the Transportation Appropriations Subcommittees in Washington Sept. 19. Expect greatly increased scrutiny -- especially with "Known Shipper" rules.

European Transport Ministers in Brussels on Sept. 14 agreed to boost airline security standards across the EU. The 15 EU states decided to implement so-called "Document 30" which sets out minimum standards for airport security -- lays down guidelines for X-ray screening of luggage, cargo, mail & personnel, for selection of staff, restricted zones & access to aircraft. Britain already adheres to "Document 30" but many EU countries do not.

Meal Service will be suspended for coach passengers (evidently not in 1st Class) on American & TWA by Nov. 1 on domestic flights. Ah, Er -- did we mention that airlines should be trying to attract passengers to resume their use of U.S. airlines? What? We believe that whoever thought up this grand idea should be sent back to the "New Coke Memorial Training School." Especially in times of crisis -- fools are often mistaken for visionaries.

Despite turmoil in the airline sector following terror attacks in the U.S., EU transport & environment ministers said they would push for air fuel to lose its tax-free status at a meeting of the Int'l Civil Aviation Organization (ICAO). European Union will call on the rest of the world to tax aviation fuel as a way of curbing the environmental impact of air travel. What? Under a long-standing international agreement, aviation fuel used for Int'l flights cannot be taxed. Legally, the EU could agree internally to tax fuel, but the EU's executive Commission has warned against this option. It would be paid for by imposing some kind of charge on airfreight. Craziness.

On Sept. 13, two jets had taken off for New York on the understanding that U.S. airspace had reopened to non-U.S. carriers, but it had not. Portuguese & Italian airliners that had left Lisbon & Rome for New York were turned back early into their flights after the FAA ordered all planes without American registration to return to their points of origin. Int'l airlines were allowed to leave the U.S., however, upon application. Indeed, the passenger manifests were quite carefully studied.

ABX Air, Inc., a subsidiary of Airborne, Inc. announced Sept. 12 its entrance into the U.S. Civil Reserve Air Fleet program. The commercial air carrier industry is vitally important to the nation's rapid mobilization capacity. BRAVO.

The VI Air Cargo Americas Congress, to be held Oct. 31-Nov. 2, in Miami, will change its focus from logistics & business opportunities in the Americas to air cargo security in light of the nationwide emergency.

Muttlucks Inc., based in Toronto, that makes padded boots for dogs sent hundreds of pairs to New York police to help protect their canine unit's paws from splintered glass & debris while they help search in remains of World Trade Center. But because of delays in air transport & tightened security at Canada-U.S. border, a police escort was needed to get latest shipment across this week.

Liabilities of Air Carriers Following a Terrorist Attack, read : www.forwarderlaw.com/feature/terror.htm.

Sometimes there just is no plan that works, as Amtrak's California Zephyr heading from Chicago to Emeryville, Calif. carrying stranded airline passengers & others to California on Sept. 12, crashed into a freight train, derailed & caught fire in the western Utah desert. There were no serious injuries. Two locomotives were pulling 263 passengers & 14 crew in 15 cars, including 7 passenger cars.

OCEAN MODE
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We have lost the light of noted marine surveyor Ralph Kershaw, NAMS-CMS, from Mass. -- on American Airlines Flight 93. Jack was a hero.
Port Authority of New York & New Jersey Press Releases. www.panynj.gov/pr/pressrelease.php3?id=93
The Port Authority of New York & New Jersey had just unveiled a Web site when the attack occurred. 'First' (Freight Information Real-Time System) provides real-time information on ship arrivals as well as the status of cargo & activity at terminal gates. The ships will return. www.firstnynj.com/
Port of New York & New Jersey closed. The Gloucester Marine Terminal, Gloucester, New Jersey; & the Marine Terminals in Philadelphia are open & operating. U.S. Army Corps of Engineers closed the locks at Sault Ste. Marie, Mich. Port of Duluth -- now open.
Potomac River remains under strict U.S. Coast Guard security & closed to vessel traffic near Washington, D.C.
Week-long ban on recreational & private navigation in waterways around Manhattan lifted by U.S. Coast Guard late Sept. 18. Still restrictions as to how close vessels can cruise to sensitive areas. >> All ships entering San Francisco Bay being inspected -- process usually takes 2 hours. Both commercial vessels & pleasure craft should expect more boarding. Coast Guard is also reminding watercraft operators to stay 100 yards away from Naval ships, unless moving in narrow channel.
Status of all U.S. ports reported at our "Vessel Casualties" page. Also reported -- a partial list of maritime law firms destroyed or affected. www.cargolaw.com/presentations_casualties.html
Fire Dept. of New York Fireboats have played an important role in supplying fire fighting water to battle blazes at the World Trade Center. The fireboats acting as floating pumping stations are manned by NYFD engineering members from nation's oldest maritime union, the Marine Engineers Beneficial Assn. District 1. These firefighters are said to have been on a 24 hour on & 24 hour off schedule while supplying their NYFD brothers with much needed water from the Hudson River. MEBA members & firemen were also involved in the search & rescue while off duty. BRAVO.
Lloyd's of London underwriters have increased war-risk insurance premiums for ships calling in the Middle East & parts of the Mediterranean, "We just received the list of affected countries 5 minutes ago," one ship manager in the N. of England told Reuters Sept. 17. Lloyd's declined to comment on size of surcharge but another ship manager in Mediterranean said a ship planning call at Haifa, Israel, last Sept. 14, had been asked to pay a one-time surcharge of US$110,000. The ship canceled voyage as a result.
South Korean airlines & shipping companies said Sept. 20 their war risk insurance premiums via Lloyds would jump 500% to 700% annually as a result of rising tensions following last week's deadly U.S. attacks. Perhaps an overestimation.
P&O Princess Cruises said the net cost to the 3rd largest luxury cruise ship operator of last week's attacks in the U.S. was US$3-5M. Just the beginning. Just a representative sample from the industry.

TRADE
---------

The World Trade Center was truly an "International City' -- citizens of 80 nations may have lost their lives in the attack. There were 200 lost from our brother country -- the United Kingdom.
U.S. Customs Service was placed on "Code Red" or high alert Sept. 11. U.S. Deputy Treasury Secretary Ken Dam said, "For the record, Customs never closed the U.S. borders, rather, the highest level of security has had the effect of slowing border crossings. Commercial cargo continues to flow into the U.S." Dam said. "The American economy is open for business." >> All 760 U.S. Customs, New York personnel have been accounted for. Customs office located in the World Trade Center complex, suffered severe damage. It was a full service office, processed drawback and had offices for labs, agents, inspectors & lawyers. All safe.
U.S. Customs agents confirmed Sept. 13 that it was searching all cars at selected crossings along the 2,100-mile border with Mexico. U.S. Customs spokesman in Washington, would not indicate which crossings were involved or when or why the searches would be conducted in the future.
U.S. Customs has found new office space to house its National Commodity Specialist Division, which was displaced during the terrorist attack on the World Trade Center. Agency has suspended, until further notice, the 30-day tariff classification, marking, & NAFTA rulings program, which was administered from the NCSD office. Industry's requests which had been made to the NCSD prior to the attack are presumed destroyed. The suspension of the rulings program does not eliminate or relieve a party qualifying as an importer of record of the statutory requirement to exercise reasonable care in making entry or completing entry of merchandise. For now, importers with questions can consult a U.S. Customs Broker, or use Customs' Web site to research prior rulings & to read the Customs informed compliance publications, such as "What Every Member of the Trade Community Should Know about Reasonable Care." For more information, contact Anne Lombardi, deputy executive director of Customs' Trade Programs, at (202) 927-0300. www.customs.treas.gov
Immense Perishables disruption, as thousands of tons of U.S.-bound fresh produce -- including fish, flowers & vegetables -- remained grounded throughout Latin America on Sept. 14 as the U.S. gradually phased-in air traffic.
In Hong Kong, more than 1,500 tons of goods headed to North America had piled up at warehouses between Sept. 11 & 14, said the 280-member Hong Kong Assn. of Freight Forwarding Agents.
South Korean companies failed to deliver about US$100M worth of exports (US$30M a day) to the U.S. during the week of Sept. 11 as terror attacks froze all airborne transport. South Korean exports to the U.S. total about US$2.5B a month & about 25% of the amount is transported through air cargo. South Korea's 2 airlines (Asiana & Korean) said on their losses from canceled flights to the U.S. for Sept. 11 to Sept. 14 were estimated at US$15.5M.
Transportation Maritima Mexicana, S.A. de C.V. (TMM), the largest Latin American multi-modal transportation company & owner of controlling interest in Mexico's busiest railway, TFM, said freight movements to/from the U.S. on TFM railway have not been impeded by heightened security at the U.S. - Mexico border.
The Western Cargo Conference remains on schedule for Oct. 4-7 in Vancouver, B.C. -- according to Robert E. Coleman, president of the Pacific Coast Council of Customs Brokers & Freight Forwarders Assns. "WESCCON participants will be among the 1st in our Country to learn how our dealings with our vendors & government agencies may change, and what steps we need to take to ensure we conduct our business correctly," Coleman said. www.wesccon.com.
Afghanistan's military capability could be limited by the ruling Taliban's decision to stop cultivating opium, a senior official of the U.N. Int'l Drug Control Program told Reuters on Sept. 19. "We expect Afghan opium production to be down to less than 200 tons this year from 3,276 tons in 2000," the UNDCP's chief of research said from his headquarters in Vienna. Until last year, Afghanistan was the world's largest producer of heroin, which is made from opium. The drugs trade is believed to be a source of financing for Afghanistan's ruling Taliban. What truly swell guys.

COMPANIES
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Major Transport Industry Related Donations: AIG Insurance $10M; Boeing Corp. $5M; Caterpillar Corp. - excavators & generators; Chevron $5M; Daimler-Chrysler $10M; Exxon-Mobil $5M; Ford Foundation $10M; Texaco $5M; Worldcom - free office space & phones to those displaced. BRAVO.
Mercury Air Group announced Sept. 12 that Mercury Air Centers would provide free use of their airport facilities nationwide for any private or military aircraft on a humanitarian mission to New York. Mercury provides fuel to these aircraft at cost & not charge airport ramp fees. Contact Mercury's Brian Swift at (770) 454-5001. Mercury Air Centers operates one of the nation's largest fixed base operations-private, general aviation terminals-located at 19 airports in the U.S. --including Atlanta, Dallas & L.A.
Node Com Inc. has made available its extensive resources & expertise to World Trade Center tenants & other New York companies whose data centers or disaster recovery facilities were damaged in the terrorist attack.
Norfolk Southern Railway Company advised New York that it is offering free transportation service for removing non-hazardous construction & demolition debris from the World Trade Center site. Norfolk Southern has arranged to provide up to 1,000 heavy-duty rail cars that will be staged in the North Jersey Shared Assets Area for transport of debris to disposal sites on its rail system.
RecruitUSA is offering services at no cost to companies victimized by the attack.
......... There are so many others reaching out to assist the trade & transport industry.

INTERNET
--------------

"Tell It To The Marines" -- our The Cargo Letter page - "A National Symbol Points The Way From Sept. 11." Also a roster of U.S. Military loss at the Pentagon. www.cargolaw.com/2001nightmare.sept.11.01.html.
American Red Cross.
Jonathan Spencer, the New York based claims specialist was visiting the WTC at the time of the attack. It could have been much worse. He has kept watch on our missing colleagues. Read his moving account. www.jonathansspencer.com/Sep1101.htm.
The Cargo Letter -- our Online news bulletins since Sept. 11 -- also listing & status of transport businesses in World Trade Center. www.cargolaw.com/presentations_casualties.html.
Disaster Relief
Hijacking -- A Favorite Tool of Terrorists
New York Office Space -- now reduced by 3.6% after the terrorist attack. Adequate replacement space available. Details here. www.costargroup.com/wtc/

Special Editors Note: The single most decorated combat unit in WW II was the famous U.S. Army 442nd Regimental Combat Team -- entirely manned by Japanese Americans. Get it? Just as we must defend freedom in this dark hour of American history -- so we must also protect our fellow Americans. Please stand ALL Our Ground to protect the millions of loyal Islamic Americans who join with our country to defend the American way of life. I spoke with an older Arab American gentleman last week who was spit upon in public by some young tough guy. The tough fool did not know or perhaps care that this older Arab American gentleman had crossed Omaha Beach on D-Day in 1944. It should make us want to cry. FIGHT to keep the American democracy a beacon of freedom. Let us remain proud of exactly what we are fighting for. Do not just tolerate our fellow Americans -- embrace them as our fellows -- because they are fellow Americans. www.njamf.org/honor.htm.

One the other hand, those who brought this attack on America & the free world -- wherever they may live -- or whoever may protect them -- are monsters who must be hunted down. We are sadly persuaded that the main reason chemical weapons or worse were not used on New York -- is that those terrible weapons were not yet ready to be used against us.. A grim reality. God Bless America & the lights of freedom. McD

OUR REGULAR NEWS -- IS BELOW (Click on the sections) -- There Was Little New To Report After Sept. 11 -- But We All Will Move Forward.

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

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The Cargo Letter

THE CARGO LETTER [369] Air & Ocean Logistics - Customs Broker News 21 September 2001

GOD BLESS AMERICA

INDEX to The Cargo Letter:

OUR Top Story: American Rises

_{The Cargo Letter}

THE CARGO LETTER [369]
Air & Ocean Logistics - Customs Broker News
21 September 2001