The Cargo Letter
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
30 January 2002
Good Wednesday 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."
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
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
- Concern For Argentina Deepens ........
as President Bush warned on
Jan. 15 that Argentina will face a "bleak & stagnant future" unless it
embraces Int'l trade & other free-market economic policies amid a devastating
recession. He reiterated that U.S. aid through global lending institutions
will come only after Argentina assembles a long-term economic plan. Bush also
said he will propose an increase of almost US$50M in the American
contribution to World Bank programs that help the poorest countries. On
hemispheric matters, Bush said he will press for free-trade pacts with
Central American countries, which could pave the way for the Free Trade Area
of the Americas that Bush seeks. Argentine President Eduardo Duhalde also has
expressed interest in pursuing that hemispherewide free-trade zone, he said.
Bush had sharp words for Duhalde, a fierce critic of Argentina's last decade
of free-market reforms that brought growth but often failed to close the gap
between the few rich & the legions of poor. Bush answered that "free markets
& open trade are the best weapons against poverty, disease & tyranny" Some
analysts say Argentina is drifting toward greater projectionist policies &
away from engagement in the global marketplace. Argentina's bankruptcy could
force trade barriers to protect domestic industries, they say. "Those who
promise painless protectionism or security through statism assure a bleak &
stagnant future for their people," Bush said at the Organization of American
States. Cargo trucks in past weeks have turned back from Argentina's
borders since the government started changing the rules on when foreign firms
will be paid abroad & devaluation near-halved dollar values. Ever-changing
government regulations has also roiled shipping & even multibillion dollar
manufacturers. Consumer demand has withered for imports whose prices have up
to doubled on store shelves in past weeks. "Cargo has been left at the border
or returned to point of origin," said Alejandro Sproviero, Argentine
operations chief at Hellmann Worldwide Logistics. Maersk Sealand says all
freight to/from Argentina is now required to be paid in U.S. dollars. As of
Jan. 3, all shipments must also be paid outside of Argentina, Maersk said.
- New Life For World Trade Center ........
as steel from the wreckage
is destined for India & China, where it has been sent for recycling & new
construction. One firm taking steel from the huge project to clear Ground
Zero is New York's Metals Management, which has bought 70,000 tons of scrap
from the ruined twin towers, some of which has been shipped across the
Pacific to S.E. Asia. 4 or 5 vessels have already sailed from New York with
the scrap. In the cargo are "very dense" steel girders from Ground Zero,
which could finally yield 250,000 to 400,000 tons of scrap for recycling. The
World Trade Center's broken steel outer skeleton is composed of steel beams
up to 2 feet thick. Sources in Chennai port, India said two 33,000 ton
shipments had already arrived, a 3rd was on its way & a 4th was soon to
arrive at India's West Coast port of Kandla. The M/V Borzna arrived in
Chennai in early Jan, a 3rd of it's cargo from the twin towers. A 2nd ship,
M/V Shen Qua Hai, being unloaded. Sources said beams were so dense that a
full load would probably break through the bottom of the ship, so they sail
partly loaded. It is said that demand for 20 or so crane-fitted ships to do
the job could well be enough to boost the freight market.
- Taiwan Is No. 144 ........
as on 1 Jan, Chinese Taipei became 144th
Member of the WTO, 30 days after it had notified the WTO that it had
completed domestic ratification of its accession package. Accession marks end
of attempt to enter the WTO dating back to 1990, & raises hopes for better
ties with its giant neighbor China. WTO Membership will mean mostly cheaper
prices for Taiwanese consumers, though agriculture & labor-intensive
industries are expected to suffer, causing already record-high unemployment
levels to rise further.
- Railing To Free Enterprise ........
as a federal oversight panel for
troubled Amtrak voted Jan. 12 to recommend opening the nation's intercity
rail system to competition. Amtrak, for 3 decades the nation's monopoly
provider of long-distance trains, would be competing with private companies.
But Amtrak's tracks & stations, as well as its authority to make rail policy,
would be distributed among state, federal & private entities. The plan,
approved 8-1 by Amtrak Reform Council, is only a recommendation. Congress
will decide Amtrak's future after it receives a final version of the plan
Feb. 7. The council opted for the most radical & free market-friendly option
among three plans it considered. The only member to oppose the plan was
Charles Moneypenny, representing labor interests on the panel. Established by
Congress in 1997, the panel has drawn praise from critics of Amtrak who
contend mismanagement is responsible for its perpetual financial problems.
Amtrak supporters retort that problem is a paucity of federal financing for
an overlooked mode of transportation. Amtrak Reform Council:
- Intermodal Woe ........
as U.S. intermodal rail traffic finished 2001
down 2.6%, to 8.94 million units, according to the Assn. of American
Railroads. Intermodal volumes fell 1.5% in Dec. & 2.3% in the 4th quarter of
2001. While intermodal traffic was down, total freight ton-miles reached a
record 1.49 trillion, up 1.1% from 2000. Carload traffic -- which excludes
intermodal - was also off for the year, despite improvements of 2.9% in Dec.
and 1.8% for the 4th quarter. For the year, carloads fell 0.7% to 17.25
million units. Healthy gains in coal volumes, up 5.2%, were offset by
declines in nearly all other commodity categories, AAR said.
- The Little Engine That Got Big ........
as RailAmerica Inc., the big
short-line & regional railroad operator, has acquired ParkSierra Corp., which
operates 3 U.S. West Coast railroads, for US$48M. The purchase price
comprises US$23M in cash & about US$25M in RailAmerica stock. ParkSierra,
based in Napa, Calif., includes the Arizona & Calif. Railroad, the California
Northern Railroad, and the Puget Sound & Pacific Railroad. The railroads
operate 751 mile of track in 4 western U.S. states with 31 locomotives & 98
employees. With the purchase, RailAmerica now owns 50 short-line & regional
railroads operating 13,200 route miles in the U.S., Canada, Australia & Chile.
- Moscow Holds The Line ........
as Russia delayed a rise in prices for
railway freight on Jan. 15 to hold back inflation & said it would be
sensitive in carrying out further increases in state-regulated tariffs.
Russian inflation was above target last year, coming in at 18.6% after 20.2%
in 2000. But electricity & gas firms as well as railways are clamoring to
raise prices nearer to world levels to cover costs & attract investment. The
spokeswoman for Prime Minister Mikhail Kasyanov said he had canceled a
planned 14% rise in railway freight tariffs which had been due to take effect
from Jan. 20.
- Mountain Freight Link To Return ........
as the Mont Blanc road
tunnel linking France & Italy beneath the Alps could be reopened to cars &
light traffic by mid-Feb. The tunnel closed after a fire in March 1999 killed
39 people. Reopening of the vital north-south European road freight link has
twice been postponed from an original date of mid-December, angering freight
firms sick of being forced to make expensive and time-consuming detours.
- Eurotunnel Clogged ........
as the Anglo-French Channel Tunnel
railway operator Eurotunnel said on Jan. 22 it lost around US$29M of freight
revenues last year because of illegal immigrants trying to cross into Britain
from France. The firm, which launched a new bid this month to close down the
Sangatte refugee camp in northern France, said operating revenue fell 6% to
548 million pounds in 2001. The Anglo-French firm said its freight service
had been "seriously disrupted" by stowaways, but that it had restored service
quality in recent months by tightening security.
- Twenty To One ........
as the U.S. Postal Service has selected
trucking giant Consolidated Freightways to manage all USPS non-mail LTL
freight delivery in the continental U.S. The contract comes with options that
allow the USPS to extend the partnership through Feb. 2012, with a value of
at least US$9M per year. The decision condenses the USPS LTL freight network
from 20 national, regional, & local carriers to just one transportation
- Insuring Your High Value Motor Freight ........
trucking firms are only an example of many areas which have been hit hard
with insurance rate increases according to results of a joint survey
conducted by the Minnesota Trucking Assn. (MTA) & the American Trucking Assn.
(ATA). Survey shows that primary, or general liability, rates increased by
32% for carriers renewing in 2001, with those renewing their policies after
Sept.11, 2001 paying an average 37% more. Renewal rates for umbrella
insurance in 2001 were pegged at an average 74%, while rate increases after
the terrorist attacks climbed to 120%, with one hike of over 1000%. All this
said, the motor truck cargo coverage problem is nationwide. The study does
not mention the much greater problem of many insurers not being willing to
insure freight carried over a value of about US$200,000. Be prepared to
either pay higher rates -- or run the risk of your motor carrier not being
insured for the full value of your cargo. BE CAREFUL in selecting a motor
carrier to haul your high value freight ... or YOU could responsible for the
- C.H. Robinson Worldwide Gets FTS ........
as the non-asset-based
logistics provider, has acquired Smith Terminal Transportation Services Inc.,
which does business as FTS. Terms were not disclosed. FTS, Miami-based
3rd-party logistics company, provides FTL, LTL consolidation &intermodal
transportation brokerage services.
- USF Eastern Adventure Comes To Close ........
as USFreightways Corp. &
its freight forwarding subsidiary USF Worldwide have relinquished interest in
USF Asia Group, Ltd., USF Worldwide's freight forwarding joint venture in
Asia. A one-time payment of US$10M has been made to Asia Challenge, Ltd., a
Hong Kong based logistics company & USF Worldwide's former joint venture
partner. In addition, US$6M in loans will be provided to USF Asia Group. A
pretax charge of approximately US$13M to earnings will be taken in the 1st
quarter of 2002. USFreightways & USF Worldwide concluded that continued
participation in the venture was not in their best interest.
- Togther Again ........
as Stinnes AG, parent of Schenker forwarding
group, & Japan's Seino Transportation Co. Ltd., have established a 2nd joint
venture in Japan. At the beginning of 2000, Stinnes' subsidiary Schenker had
already forged a strategic alliance with Seino. The 1st joint venture --
Schenker-Seino Logistics -- has provided logistics services for the Japanese
market. With the 2nd venture, Stinnes & Seino will also contribute their air
& sea freight activities to the new company, called Schenker-Seino Co. Ltd.
Stinnes holds a 60% stake in the new venture, & Seino 40%, which will become
operational on April 1 with a workforce of 200 employees at 11 locations.
Stinnes said that the joint venture is expected to generate sales of US$112M
during its 9 months of operation in 2002. In 2003, sales revenues are
expected to increase to approx. US$156M.
- Phoenix Int'l To The Islands ........
as it will provide services to
Pacific Trucking Co. Inc. for shipments to/from island of Guam -- the
privately owned North American forwarder, CHB, & NVOCC, offers weekly ocean &
daily services to/from Guam.
- Kuehne & Nagel Seeks In-House Japan Edge ........
as it has been
granted a sea freight customs clearance license for Tokyo ports by the
Customs Clearance Division of Tokyo Regional Customs. The company says it is
one of the 1st Int'l logistics companies to have obtained such license in
- Schenker Puts On The Show In China ........
as it has acquired a
holding in Shanghai Expotrans Ltd, the Shanghai-based Chinese company
specializing in freight-forwarding for trade fairs. While Schenker had
cooperated with partner Expotrans to serve its customers in the trade fair
segment in China, it can now develop its own trade fair activities in
Shanghai. Schenker has been active in Chinese market for many years. Three of
Schenker's 18 special Trade Fair Offices in Asia are located in China.
Schenker has already provided services for trade fairs on the new Exhibition
Grounds in Shanghai/Pudong.
- U-Freight Group Buys In China ........
as its network has bought a 50%
stake in Shanghai Rijin Int'l Freight Co. Ltd which offers sea & air
import/export freight forwarding, CAAC & customs brokerage services at
offices in Shanghai, Nanjing, Guangzhou & Wuhan. Anthony Fong, managing
director of U-Freight said, “With China accepted for membership of the WTC,
it is important we increase our network to cover important centers where we
have a limited capacity at present."
- One Big Happy Danzas ........
as it has acquired the 50% holding it did
not own in Universal Air Express AB, based in Sweden -- plans to merge the
company with another Swedish affiliated company, Danzas AEI Intercontinental
- Big Deal In German Logistics ........
as Thiel Logistik AG has
acquired a majority of the business divisions of Birkart Globistics AG,
- U.S. Customs Wool Duty Refund Extends ........
as it has extended the
deadline to file a wool refund claim for year 2000 until Dec. 31, 2002. The
original deadline was Dec. 31, 2001. Customs said deadline extension is
needed to "reflect the fact that proposed legislation is currently pending
before Congress which would significantly alter the scope of section 505 (of
the 2000 Trade & Development Act) in regard to the amount of payment
manufacturers would be eligible to receive, as well as documents that a
manufacturer needs to file to be entitled to a refund, and in part, because
of destruction of records at the New York Customshouse on Sept. 11, 2001."
Wool duty refund docs should be sent to U.S. Customs, Office of Field
Operations, Wool Duty Refund Unit, 1300 Penn. Avenue, NW, 5th Floor,
Washington, D.C. 20229. Contact Bruce Ingalls at (202) 927-1082.
- Out of The Ashes ........
as evidence pulled from a vault in the
rubble of a collapsed building at the World Trade Center site enabled
authorities to dismantle a drug money-laundering network, U.S. Customs said
Jan. 15. Officials arrested 37 people & seized US$8M & hundreds of pounds of
cocaine on 14 Jan. as part of an investigation made possible by evidence once
stored in a vault at 6 World Trade Center, the destroyed 8 story U.S. Customs
building. The arrests were made in Bogota, Colombia, and in New York, Miami &
San Juan, Puerto Rico. Customs agents were lowered into the pile of debris in
Oct. to retrieve evidence pertaining to several cases. Customs would not
describe the evidence or say whether arrests are expected from other evidence
collected in the vault. Customs refuses to say whether it is looking for more
evidence in the rubble.
- Chile Lowers The Bar ........
as it has trimmed customs tariffs by 1%
to 7% as part of a plan implemented in 1999 to cut general tariffs to 6% by
2003. In compensation, the government raised the tax charged on credit stamps
and fees from 0.1% to 0.134%, moving the maximum rate to 1.6%.
- NCBFAA Move To Right A Wrong ........
as the National Customs
Brokers & Forwarders Assn. of America has launched a "grassroots" campaign to
reform the country's bankruptcy law. "Currently, if an importer files for
bankruptcy, Customs has a priority over other creditors in the proceeding
while customs brokers must go to the back of the line to pursue a claim,"
said Jon Kent, legislative rep. for the NCBFAA. "This is unfair to the
brokers as they advance duty payments to Customs. Customs benefits greatly
from this service that brokers render." Last year, Rep. Lindsey Graham,
R-S.C., introduced legislation (H.R. 2569) to amend the bankruptcy code so
that brokers would receive some measure of protection against insolvent
importers. WRITE YOUR CONGRESSMAN IN SUPPORT OF H.R. 2569.
- Arzoon Appears To Have Made It ........
as this leading provider of
Logistics Resource Management solutions on the Internet has been named a 2002
Vision Award recipient by SiliconIran, at the SiliconIran High-Tech Forum &
Awards Ceremony on Jan. 17. With blood on the ground from a two year industry
shakeout -- Arzoon seems poised to succeed in the world of Internet shipping.
As you know, so many have failed.
- Celarix Refuels ........
as one of the early logistics software
dot-coms, has had to raise another US$17M of financing led by Austin Ventures
(Celarix's existing investors also participated in this latest round) to
bring total investment in Celarix to more than US$75M. Celarix, based in
Cambridge, Mass., said it will use the funding for operations & further
product development. It expects to achieve break-even in the next 6 months.
The company was founded in 1998 to provide electronic systems for supply
- Can't Be Replaced ........
as Raymond P. Meade passed away Sun, Jan.
13, 2002 of conjunctive heart failure complicated by bronchial pneumonia.
Ray's vast knowledge of claims spanned 45 years -- covering everything from
the underwriting side of the industry, to adjusting claims on blue water
hulls & oil rigs, to his latest post as Claims Manager for the Conterm
Group/brand name worldwide. His understanding of insurance & the claims
process, his ready availability & prompt, accurate responses made him an
invaluable part of the industry team. His wisdom & fairness gained him
respect from us all. Ray was 71.
- At Least They Keep Their Heads ........
as 4 Vietnamese were
sentenced to death by firing squad Jan. 12 for smuggling & selling heroin
from neighboring Laos, a court official said. Thirteen others were given
prison sentences. The 17 suspects admitted to smuggling a total of 15.4
pounds of heroin on 11 occasions from March 1998 until their arrests in Feb,
the court official in the central province of Ha Tinh said. Vietnam has some
of the world's toughest penalties for drug-related crimes. Trading,
possessing or trafficking more than 3 1/2 ounces of heroin or 11 ounces of
opium are punishable by death. Courts sentenced 55 people to death last year
on drug-related charges.
- Manifest Destiny ........
as the U.S. Attorney's office for the N.
District of California, in San Francisco, has announced that Steven
Schneider, 54, of Malboro, N.J., Pres. of Fleet Shipping Lines, & Charles
Centorrino, 40, of Farmingdale, N.J., G.M. of Fleet Shipping Lines, have
pleaded guilty to felony charges of illegally transporting hazardous
materials & illegally placarding hazardous materials. Fleet Shipping Lines
consolidated cargo for shippers which included paint, adhesives, oxidizers,
acids & poisons. Under the plea agreements, Fleet will pay a US$300,000 fine.
If a presiding judge agrees with U.S. Attorney recommendations, Schneider
will pay a US$5,000 fine, serve 100 hours of community service, & be placed
on probation for 5 years. Centorrino will be placed on probation for 5 years.
Sentencing is scheduled for May 3, 2002.
- Puppy Love? ........
as Macau officials seized 2 skinned & gutted
puppies taped to illegal meat smugglers on Jan. 22. The puppies were part of
some 290 kilos (640 pounds) of fresh meat & innards that 14 people were
accused of trying to smuggle into the Macau territory from mainland China on
Jan. 21. The meat was carried in plastic bags taped to the smugglers' bodies.
Fresh meat imports into Macau require permits & each of the 14 accused faces
a fine of US$625 -- 7 kg. of the contraband was dogmeat -- rest was pork &
chicken. Consuming dog meat is not illegal in Macau, where some people
believe it is beneficial to health. Many dog-meat lovers travel to mainland,
where canine dishes are widely available. That mankind has domesticated only
two species over the past 4,000 years should be a matter of record. Quite
gross. Did we say gross?
- Thought For The Day ........
as we found this in "Bow Wave" the
quite great newsletter of our UK friend Sam Ignarski: Never be afraid to try
something new. Remember that amateurs built the ark. Professionals built the
It's Good To Be The Railroad!
- AMR Corp. ........
DOWN as the parent of American Airlines reported a 4th-quarter
net loss of US$734M, or a loss of US$4.75 per share.
- Burlington Northern Santa Fe Corp. ........
DOWN as net income fell 30.6% in 4th
quarter & 25.4% for 2001.
- Canadian National (CN) ........
UP as net income grew 25% in 4th quarter, to
US$184.1M, and by more than 10% for 2001, to US$646.7M for 2001.
- Continental Airlines. ........
DOWN as the usually profitable line reports 4th
quarter net loss of US$149M (US$2.58 diluted loss per share), US$220M without
federal terrorism subsidy.
- CP Ships Ltd. ........
DOWN with 4th quarter 2001 operating income of US$35M, in
line with the previous quarter's US$34M but down from record US$47M in 4th
- CSX Corp. ........
UP with 4th-quarter net income of US$54M, up 20.4% from
- Greenbrier Cos. Inc. ........
DOWN with a 1st-quarter net loss of US$5.0M. for the
period ending Nov. 30.
- Norfolk Southern Corp. ........
UP as 4th quarter net income jumped to US$115M,
from US$5M for year-earlier period.
- Northwest Airlines Corp. ........
DOWN with a 4th quarter net loss of US$216M or
US$2.55 per common share.
- Roadway Corp. ........
DOWN as 2001 net income fell 45.5% to US$30.8M, on revenues
of US$2.79B, down 8.2%.
- Tropical Shipping. ........
DOWN with lower operating income of US$6.5M for 4th
quarter, down from US$9M in same quarter in 2000. Revenue declined 4% during
the same period, to US$64.6M, from $67.4M in 4th quarter of 2000.
- Union Pacific Corp. ........
UP as 4th-quarter net income was US$275M, a 20%
increase over the 2000 level of US$229M, which included a US$72M workforce
reduction charge. For 2001 net income improve 6% to US$966M.
- UPS. ........
DOWN as 4th-quarter net income fell to US$645M, or 57 cents a share,
from US$724M, or 63 cents a share, a year earlier.
- US Airways Group. ........
DOWN with a net loss of US$1.17B for full year 2001, on
revenues of US$8.29B.
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.
[an error occurred while processing this directive]