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The Cargo Letter
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THE CARGO LETTER [372]
Air & Ocean Logistics - Customs Broker News
31 December 2001
Happy New Year 2002 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."
The World Trade Center fires were extinguished at about 1 a.m. on Thurs. Dec.
20 2001. It had been 100 days -- but America's holiday season has proceeded
with both solid hope and renewed appreciation for the lights of freedom.
Contribute your knowledge, stories & company information ........ by
e-mail to The Cargo Letter. We strive to
bring you useful information which is timely & topical. Be sure to visit our
web site:
To post comments or discuss articles, go to ....... http://www.interpool.com/tcl/disc1_frm.htm
Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel,
forwarder/broker attorneys at LAX.
INDEX to The Cargo Letter:
Section A: Section: 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
Freight Forwarder Trade Briefs
The Cargo Letter Financial Page
- Pres. Bush May Get Faster ........
as by a margin of just one vote
(215-214), the U.S. House of Representatives on 6 Dec. passed the Bush
Administration's trade promotion authority (TPA) bill -- formerly known as
'fast-track' -- which would allow the President to negotiate trade agreements
that Congress can only accept or reject, but not amend. Conservation & labor
groups expressed concern with the legislation, which they fear will undermine
efforts to promote environmental & labor standards in Int'l trade. Fast-track
authority has been granted to every president since 1974, but expired in 1994
when Congress failed to approve a renewal request by former President Clinton
due to discontent among members of Congress regarding environmental & labor
provisions in NAFTA. The new bill, which would grant TPA until 2007 (unless
Congress disapproved the authority in 2005), is now being debated in the
Senate's Finance Committee & is likely to be taken up by the Senate early
next year.
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TT Club To raise Premium -- Sets 30 Day Fuse .......... as it is to
hike premiums by 20% in a bid to address issues of concern arising from
underwriting results, reinsurance costs & investment returns. In a statement,
TT Club warned of the need to respond to adverse pressures & raise premiums
to a "sustainable level." In common with general insurance market practice,
the club also announced that it would introduce a 30-day cessation clause in
all policies to enable it to respond in the event of some unsustainable
change in the cost or availability of reinsurance. The club's statement
declares that underwriting losses over the 4 policy years from 1997 to 2000
cumulatively reached US$50M, necessitating funding from investment income &
reserves which, at the end of 2000 & after deducting losses, stood at
approximately US$80M.
Mutual P&I insurers the Swedish Club & the North of England Club have
announced a 25% general increase in premiums for next year. The Lloyd's of
London insurance market on Nov. 29 raised its estimate of losses stemming
from the World Trade Center attacks by nearly 50% to 1.9 billion pounds
(US$2.6B)
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No Cover For Terror? .......... as U.S. companies have the new problem
of whether they be insured against terror attacks? Until Sept. 11, terrorism
damage was automatically included in most policies. Since then, insurers have
been hit with up to US$70B in claims from the destruction of the World Trade
Center, and have made up some of the loss by ratcheting up prices & scaling
back coverage. Now, the insurers are preparing to exclude terrorist acts
altogether from some policies after Congress failed last week to come up with
a federal backstop plan to protect insurers from more massive terrorism
claims. The problem could turn into a crisis for some this week as policies
come up for renewal Jan. 1. As examples of companies which have deleted
terrorism coverage: AIG effective Dec. 1, 2001; ACE & Mutual Marine effective
Jan. 1, 2002.
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India - Pakistan Tensions Cut Rail ........ as the only rail link, a
mere 28 km (18 miles) from Lahore to the small town of Attari, has operated
continuously since 1977 but will be halted on Dec. 31 along with buses plying
the same route as part of India's response to war jitters with Pakistan. The
diesel locomotive that rattles along the tracks 3 to 4 times a week has just
1 more journey to make before the end of the year, when the 3,000-km
(1,800-mile) frontier created in 1947 will again be sealed to ordinary folk
on the ground. It is hardly one of the world's great railway journeys but the
train that chugs over the border between nuclear rivals India & Pakistan has
been a lifeline for divided families for a generation. Tensions have soared
since a Dec. 13 suicide attack on the Indian parliament which New Delhi
blames on Islamic militant groups based in Muslim Pakistan. Both sides
currently stand their nuclear weapons on full alert -- with full scale
military mobilization on both sides -- pray.
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China Becomes Permanent ......... as China officially entered the
World Trade Organization (WTO), becoming its 143rd member on Dec. 11. Next,
on Dec. 28, U.S. President George W. Bush granted permanent normal trade
status to China, a move that Bush called is "the final step in normalizing
U.S.-China relations." The move will go into effect Jan. 1. Also in the
area, trade competition heats as Taiwan's 2 refineries cut their oil prices
by as much as 5% on Dec. 11 in a price war preceding the island's own
admission into the WTO.
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Get Ready -- Get Euro! .......... as the Herculean task of currency
changeover is set for New Year's Day. Coins & banknotes go into circulation
in 12 countries of the Eurozone on Jan. 1. Greece began use of the currency
on Dec 17, 2001. Three EU nations -- Britain, Sweden & Denmark -- have opted
out of the initial launch. The British Royal Palace has made clear -- it will
NOT accept Euros for purchase of tour tickets. This should be interesting.
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Hong Kong Feels The Slow Down ....... as the values if it's total
exports & imports of goods fell markedly further in Oct. 2001 over a year
earlier, according to external merchandise trade figures released by the Hong
Kong Census & Statistics Dept. In Oct. 2001, the value of total exports of
goods (comprising re-exports & domestic exports) decreased by 13.9% over a
year earlier to US$17.1B, after an 11% year-on-year decline in Sept. A
visible trade deficit of US$243.6M, equivalent to 1.4% of the value of
imports of goods, was recorded in Oct. 2001. This was smaller than the
corresponding deficit of US$500M, equivalent to 2.4% of the value of imports
of goods, recorded in Oct. 2000. For the 1st 10 months of 2001 as a whole,
the value of total exports of goods decreased by 4.8% over a year earlier.
Within this total, the value of re-exports fell by 3.4%, while the value of
domestic exports shrank by 15.3%. Over the same period, the value of imports
of goods declined by 3.9%.
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Yes, We Have No Banana War .......... as European Union agriculture
ministers adopted regulations for a new banana-import system this month,
formally marking an end to a long-running dispute with the U.S. & Ecuador.
The new system "signals not only the end of the banana dispute but will
result in the lifting of some US$200M worth of U.S. sanctions, which is the
good news EU exporters have been waiting for," EU Trade Commissioner. Pascal
Lamy said.
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Soft Wood -- Hard Stance ......... as on 5 Dec., the WTO Dispute
Settlement Body (DSB) launched an investigation into allegedly illegal U.S.
countervailing duties on Canadian softwood lumber. The panel comes into
existence after a 2nd request from Canada, with the 1st being blocked by the
U.S. at a 5 Nov. DSB meeting. The investigation will address a 9 Aug. U.S.
imposition of a 19.31% countervailing duty on Canadian softwood lumber. U.S.
WTO Ambassador Linnet Deily insisted again that the request for a panel was
"premature" due to the "preliminary" nature of the duties imposed - which
combined, effectively tally 32%. This panel is one of a number of actions
currently underway to resolve the dispute - including intensive bilateral
negotiations, as well as a US$250M lawsuit against the U.S. government by
Canadian logging company, Canfor Corp.,
under NAFTA.
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Libya Turns West ....... as it's government has applied to join the
World Trade Organization. The application was lodged earlier this month &
should be brought up for inclusion on the agenda of the WTO general council
early next year.
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China Turns Blue ........ as the PRC will use an export license with a
light blue background to document textiles exported to the U.S., starting
Jan. 1. There will be a 1 month grace period in which importers can use
either the new form or the current light green license, but U.S. Customs will
only accept the new form for goods that leave China after Jan. 31. The visa
stamp presently in use & the requirements for the Electronic Visa Information
System are not changing, U.S. Customs said.
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Calling All Brokers ......... as the National Customs Brokers &
Forwarders Assn. of America is urging brokers to attend a 2 day
association-sponsored Trade Support Network conference in Washington, Jan.
18-19. The TSN was created by U.S. Customs in 1994 to gain industry input
into the development of the agency's future computer system, the Automated
Commercial Environment (ACE). About 120 industry executives, from a broad
range of industry interests, such as brokers, importers, carriers, sureties &
trade associations, attend the TSN meetings to discuss various areas of the
new system that will affect trade. NCBFAA has members involved in TSN. The
group has learned that there are changes coming in ACE which "profoundly"
affect the broker industry in the near future. So be there.
www.ncbfaa.org
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Trouble At The Revolution? ....... as rumors persist that the Project
Bolero organization has laid off some 20 staff -- about a 6th of the
organization. Australia & New Zealand Banking Group Limited (ANZ), one of
Australia and New Zealand's leading banking & financial services groups
recently joined the online Int'l trade organization.
www.bolero.net
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EU Packing A Punch ......... as the European Commission has issued
new proposals on the recycling of packaging materials, which would force EU
members to recycle 55 - 70% of all such materials by 2006, in comparison to
the current minimum of between 25% & 45%. The rules, now up for approval by
EU member states & the European Parliament, would also increase targets for
recycling specific materials from the current 15% to 60% for glass, 55% for
paper & board, 50% for metals and 20% for plastics. For consumers, not
shippers, the proposals are likely to increase costs.
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CNF Shake Up -- Hello Menlo -- Bye Emery Worldwide Airlines .........
as a new company has been formed in the global logistics, transportation,
freight forwarding and supply chain management field called "Menlo Worldwide"
-- formed by combining Menlo Logistics, Emery Worldwide & Vector SMC -- it
began operations on Dec. 5. Corp. parent CNF said that Menlo Worldwide would
be much better positioned to capitalize on the growth prospects of the
enormous global supply chain management market than any of the entities on
their own. Emery, newly aligned as a division of Menlo Worldwide, will
continue to provide full network service for its North American overnight &
deferred services by utilizing a fleet of contract air carriers, as it has
done since mid-August. CNF also announced that its certificated airline
subsidiary, Emery Worldwide Airlines, would not resume operations. The
airline has been grounded since Aug. 13. Emery Expedite!, also a CNF
subsidiary, will team up with Continental Airlines Cargo to facilitate the
transport needs of the airline's express package service Quickpack.
The CNF portfolio will now have 2 basic operating companies, Con-Way
Transportation Services & Menlo Worldwide.
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Kuehne & Nagel Buys In Italy ....... as it bought the Milan based
"Logistics Srl.", a company specialized in warehousing & distribution, with
25,000 square meters of warehouse space.
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Schenker Gets A Shamrock ......... as it has increased its presence in
Ireland's freight market by acquiring long-time partner Inter-Continental
Cargo Ltd. The new company, Schenker-ICC Ltd., will provide land transport,
Int'l air & sea freight, & other logistics services. It will also maintain a
comprehensive trailer & express service between Ireland & the U.K.
-
Phoenix Int'l Freight Services New Star ....... as Emil Ray Sanchez is
promoted from corporate controller to V.P. of Finance. Mr. Sanchez joined the
company as a messenger, with a degree in finance & Int'l business. During his
rise within the company he obtained his MBA, CPA & customs broker license.
"Emil has played an important role in setting up our foreign subsidiaries,
reorganizing the finance dept. & many other key projects," said CEO Bill
McInnery. "He is having a remarkable career at Phoenix," he added. We seldom
report executive appointments, but in this case -- Bravo Emil!
-
Customs Not Deterred ........ as U.S. Customs seized 1.79 million
pounds of smuggled drugs in its fiscal year ended Sept. 30, a 16% increase
over the year-earlier period & almost double that seized 4 years ago.
-
Intermodal Continues Slide ........ as U.S. intermodal traffic was
down 1.4% in Nov, to more than 687,000 units, according to the Assn. of
America Railroads. For the 1st 11 months of 2001 U.S. intermodal traffic
totaled 8.30 million containers & trailers, down 2.7%, AAR said. U.S. rail
carloadings fell 1.0% to 16.01 million carloads.
-
Danzas Hits The Road ....... as it has formed a trucking network in
South America, offering time-definite door-to-door deliveries in Brazil,
Argentina, Chile, Uruguay, Paraguay & Bolivia. Coordinated by Danzas Brazil,
the service will use Brazil as a hub for weekly trucking frequencies, with
major cities in the other 5 countries serving as spokes.
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Did You Know? ........ that modern motor carriers like Consolidated
Freightways equip over-the-road drivers with satellite communications that
support E-mail, tracking & tracing information, and the latest weather &
driving conditions?
www.wired.com/wired/archive/9.12/sheffi.html?pg=1&topic=&topic_set=/
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Rent-A-Baby ......... as officials have broken up a sophisticated
drug-smuggling ring in which the suspects allegedly used baby formula cans
and sometimes even rented babies to sneak cocaine & heroin into the country.
Thirty-five people were charged on Dec. 14, including 4 Chicago parents
accused of renting their children for money or drugs. Smugglers allegedly
used one infant on 6 trips -- the 1st at 3 weeks old. "This operation preyed
on the great respect that we as human beings all afford mothers & babies -
and betrayed that respect brazenly," said U.S. Attorney Patrick Fitzgerald.
"Renting babies for the purpose of allowing drug dealers to smuggle cocaine &
heroin is truly a new low in drug smuggling." Indictments alleged
Chicago-based conspiracies in which drugs were smuggled into the U.S. from
Panama & Jamaica for distribution in Chicago, New York & the UK between 1996
& 1999. Women couriers using 20 infants made at least 34 smuggling trips. The
women used either their own children or babies provided to them for the trip.
In Panama, some of the women would be given baby formula cans containing
liquid cocaine. Others would insert heroin into their body cavities. Still
others traveled with cocaine in rum bottles or concealed in suitcase handles.
All of them would return to Chicago or New York with the drugs. Truly the
Taliban of smugglers.
-
Air France Cargo ........ DOWN with a negative operating income of 36 million
euros on 30 Sept. 30 against a positive result of 20 million euros on 30
Sept. 2000.
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FedEx Corp ......... UP with a 2nd-quarter net income jump 26% to US$245M, boosted
by a US$116M in compensation from the Air Transportation Safety & System
Stabilization Act. Operating income for the period ending Nov. 30 was
US$433M, also up 26%, on revenue of US$5.14B, up 5% from the year-earlier
period.
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Hapag-Lloyd Group ........ UP for 1st quarters of 2001 as operating profit after
depreciation and interest surged by 19% to 250 million euro, with group sales
rising by 6% to 3 billion euro.
-
Mitsui O.S.K. Lines ........ DOWN with a consolidated operating income of US$313M
for the 6 month period ended Sept. 30, down 4%, -- warned of a further
deterioration of the shipping market.
-
P&O Nedlloyd ........ DOWN with operating profit for 3rd quarter of 2001 of
US$30M, US$45M lower than the US$75M for same quarter last year. That brings
the operating profit to US$107M for year to date. Volumes were up 6% for the
quarter compared with last year, but revenue rates were down 4%.
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Thai Airways ........ DOWN as the financial result for 2000/2001 fiscal year,
from Oct. 2000 to Sept. 2001, recorded a total revenue of US$2.94B with a net
profit of US$43.9M -- a drop of US$63.4M, or 59.11%, compared with same
period last year.
Please click below for other sections:
Section A: Section: 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
The Cargo Letter Correspondents:
Michael S. McDaniel, Esq., Editor
(Countryman & McDaniel).
Cameron W. Roberts, Esq. (Countryman & McDaniel).
Written from wire stories, the Associated
Press, Reuters, Hong Kong Shipping News Lloyds & other world sources.
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