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

OUR "C" Section: FF World Ocean News

FF World Ocean Briefs

• Floating Missiles ........ as the U.S. Coast Guard has called on the U.N. to overhaul its maritime regulations to prevent terrorists using ships as seaborne missiles against coastal cities & to clamp down on weapons smuggling. A paper submitted to the U.N.'s Int'l Maritime Organization (IMO) on Jan. 15 calls for security officers on all ships. It also called for identification checks for all seafarers; security assessments to be conducted on all ports, and discussions on the electronic sealing of all shipping containers & the fitting of hijack alarms. "A critical part of improving maritime security is ensuring that the seafarers involved in the maritime transportation ..... pose no threat to national security," said the U.S. Coast Guard paper. Since Sept. 11, maritime security experts have repeatedly warned of the U.S.' vulnerability to attack from the sea. They say fuel-laden tankers could be seized & used as floating missiles, or any one of tens of thousands of shipping containers shuttled into the country each day could contain a nuclear device.
• Fatal Study ........ as the disappearance of more than 200 supertankers & container ships during past 20 years is now blamed by scientists on monster waves of up to 36 meters. Team of oceanographers at Technical University in Berlin re-created in tank gigantic "one-off" seas capable of breaking a 180m-long ship in half. Monster waves have provided material for countless novels & films, including Sebastian Junger's recent bestseller "The Perfect Storm."
• Slower Growth ........ as world seaborne trade slowed markedly in 2001, after a boom year in 2000, according to a report by the UN Conference on Trade & Development, based in Geneva. The 2001 growth rate of 3.6% is "likely to have slumped considerably in 2001 ... possibly to as low as 2%," the U.N. body said, citing preliminary projections. The projected decline is mainly attributable to the impact of the economic downturn observed in the U.S. and, to a lesser extent, in Europe, UNCTAD said in a new report, "Review of Maritime Transport 2001." In 2000, world seaborne trade for all commodities reached a record high of 5.88 billion tons. Developing countries in Asia now own 14.3% of world tonnage, accounting for 73.6% of the fleet of all developing countries, UNCTAD statistics show. African developing countries, by contrast, own 0.7% of world tonnage. UNCTAD said registration of ships by developed market-economy countries & major open-registry countries accounted for 25.2% & 48.5% of the world fleet, respectively.
• Darkest Before The Dawn ........ as overcapacity pressures will negatively impact the container shipping industry throughout 2002, but a recovery in prices may follow in mid-2003, according to a report by Drewry Shipping Consultants. The report forecasts growth in world cellular containership capacity of 14.5% this year, well in excess of a predicted increase in container trade volume of 5.8%. "This will keep vessel utilization levels under pressure," Drewry said. The U.K.-based consultancy firm does not expect any significant recovery to take place in 2002, but said it is "hopeful of an improving pricing environment from mid-2003 onwards." Drewry reported that world container port throughput was expected to have increased by just 4.3% last year, a record low growth rate in the container industry's history.
• New FMC Chief Tapped ........ as President Bush intends to nominate Steven Robert Blust to commissioner of the U.S. Federal Maritime Commission & upon confirmation designate him chairman of the agency for a 5 year term. Blust is currently pres. & CEO of Bay Int'l Terminals in Tampa, Fla. He joined Lykes Bros. Steamship Co. in 1987 as V.P. from 1991 to 1996. Blust also worked for the Jacksonville Port Authority in Florida from 1985 to 1987. Blust is graduate of the U.S. Merchant Marine Academy & holds an MBA from Tulane University. If confirmed, Blust would replace Harold J. Creel, Jr., who has chaired the FMC since Feb. 1996. Antony M. Merck has resigned as a commissioner of the FMC.
• Going Up ........ as TSA carriers have noted a significant decline in overall profitability since the last round of service contracts took effect. Internal estimates by the 14 individual lines in the Transpacific Stabilization Agreement (TSA) indicate combined losses of more than US$1.2B in 2002 if current rates continue into the coming contract season. According to industry sources, eastbound transpacific freight rates have decreased by an estimated 35% since last May. Transpacific lines say they will implement a program whereby rates in their 2002 contracts, effective from May 1, will be restored to levels previously in effect on May 1, 2001. Carriers will review & monitor individual market sectors, and in some instances may take a more commodity-specific approach to pricing than in the past. TSA members include: APL, CMA CGM, Cosco, Evergreen, Hanjin, Hapag-Lloyd, HMM, K Line, Maersk Sealand, MOL, P&O Nedlloyd, NYK, OOCL & Yang Ming.
• Europe/Middle East Rates Up ........ as Member lines of the Europe Middle East Rate Agreement will raise rates from the UK, North Continent & Scandinavia to Mideast Gulf ports by US$200 per 20-foot container and US$300 per 40-footer, effective March 1. Members of EMERA are AWS (Ellerman), CMA CGM, Hapag-Lloyd, A.P. Moller-Maersk, Sealand, P&O Nedlloyd, Safmarine & United Arab Shipping Co.
• Singapore War Risk Rates Could Soar ........ as Commercial insurance premiums could soar after the city-state detained 13 men linked to Osama bin Laden's al Qaeda group for engaging in alleged bomb plots here, industry sources said on Jan. 15. "With the heightened awareness of the risks of terrorism, it is likely that premiums will increase," a spokeswoman from Great Eastern Life Holdings said. "This is in addition to the general shrinkage of reinsurance capacity in the sense that reinsurance companies are now reducing the capacity to take on such risks." Reinsurers -- the firms that absorb risks beyond an insurer's underwriting capacity -- have dramatically slashed their exposure to terrorism risks around the world after incurring billions of dollars in losses after deadly Sept. 11 attacks on the U.S., which bin Laden masterminded. The losses have also forced reductions in capacity across the board as reinsurers put their businesses back on track, causing insurance premiums to rise globally as corporations scramble to access the more limited cover available. Now businesses in multiracial & normally peaceful Singapore face the possibility of fresh hikes after the government disclosed that it had detained a group of local Muslim men last month for their alleged involvement in bomb plots.
• Container Lines Reduce War Surcharge ........ as various rate agreements are cutting levels of their war risk surcharges insurance.
  • The Europe Middle East Rate Agreement (Emera), Aqaba Rate Agreement (ARA) and Jeddah Service Group (JSG) have all announced reductions in extra risk insurance surcharges applicable to the Middle East, Aqaba & Jeddah respectively. Starting Jan. 22, for both eastbound & westbound vessels, Emera member lines have applied a reduced extra risk insurance surcharge of US$72 per TEU, down from $102 per TEU. Member lines are AWS (Ellerman), CMA CGM, Hapag-Lloyd, P&O Nedlloyd, Safmarine & United Arab Shipping. Also from Jan. 22, ARA member lines have applied a reduced extra risk insurance surcharge of US$53 per TEU, down from US$101 per TEU. Member lines of ARA are AWS (Ellerman), CMA CGM, Contship Container Lines, Hapag-Lloyd, Maersk Sealand, P&O Nedlloyd, Safmarine & United Arab Shipping.
  • The Far East Freight Conference member lines are withdrawing the Emergency Surcharge for Suez Canal/Red Sea Transit originally introduced 27 September 2001 in the aftermath of the terror attacks on the US. The surcharge, currently US$10 per TEU will be reduced to zero on January 15. The FEFC secretariat cautions that the lines will "continue to monitor the situation closely, and should circumstances dictate, will adjust this level again with short notice if necessary."
  • The India Pakistan Bangladesh Ceylon Conference (IPBCC) lines have announced reduced extra risk insurance surcharges following the decision by insurance underwriters to reduce the Suez Transit extra risk premium to zero. Starting Jan. 15, IPBCC lines will revise their extra risk insurance surcharges for cargo to & from Pakistan from US$130 per TEU to US$120 per TEU, dropping the US$10 surcharge for transiting the Suez. For shipments to & from India and Bangladesh transiting the Suez Canal the charge has been reduced from US$10 to zero. For Sri Lanka shipments, the charge is down from US$120 to US$100 per TEU.
• Danube Again Blue For Cargo? ........ as Serbia expects to start clearing war debris from a crucial section of the Danube river artery in March. Collapsed bridges & unexploded bombs still litter the central Europe freight route since NATO's 1999 air strikes against the government of President Slobodan Milosevic. The Danube, Europe's 2nd largest river, has been largely blocked to shipping at Novi Sad since NATO's 11-week bombing to halt Serbian repression of Kosovo's Albanians when autocrat Milosevic ruled Yugoslavia. The bombs destroyed bridges, leaving tons of concrete, spent munitions & unexploded ordnance on the river bed -- causing lost revenue mainly for shipping firms of up to US$892.9M since 1999. Traffic picked up last year after the Danube Commission marked a 5 km channel near Novi Sad. But that channel can be hard to navigate & much debris remains in the river, for example 20,000 tons of concrete from one bridge alone.
• Taiwan's Evergreen Sail For England ........ as the group has set up a U.K.-flag shipowning company to take advantage of the new British tonnage tax regime & will also trade as a container shipping line. Hatsu Marine Ltd., formally established on Jan. 2, is headquartered in London. It owns one container vessel, the 6,332 TEU M/V Hatsu Eagle, which trades on the transpacific route. The company will take delivery in March of a sister, M/V Hatsu Envoy. Three further ships in the series are also expected to join the Hatsu Marine Ltd. fleet. Over the next few years, the U.K. company will take ownership of additional container vessels, including some to be transferred from other Evergreen-affiliated companies.
• Carnival Cruises Pours On The Coal ........ as the U.S. based carrier has raised its offer for P&O Princess by 12% to about US$5.0B as it fights to win shareholders over. The cruise giant is hoping to spoil Princess' planned merger with rival Royal Caribbean & aims to have its move gather full momentum ahead of a Feb. 14 extraordinary general meeting at Princess. Carnival, fighting to retain its top slot in global cruising, on Jan. 17 raised its cash and shares bid for P&O Princess on the condition the British firm could exit a joint venture with Royal Caribbean in early 2003 at no cost.
• Ice Trapped M/V Polar Star Rescued After 27 Days ........ as Australian icebreaker RSV Aurora Australis, smashed through 8 km of pack ice during a 12 hour operation begun after strong northerly winds abated to reach stranded supply ship M/V Polar Bird, Jan. 13 . Icebreaker was diverted to help after the Polar Bird trapped in ice in Prydz Bay on 16 Dec. on way to Mawson Station. Polar Bird able will follow the Aurora Australis to safety along passage cleared through dense pack ice. A helicopter shuttle of 34 Australian Antarctic expeditioners from Polar Bird to Aurora was completed earlier this month. That operation left only Polar Bird's crew of 21 & 4 expeditioners - the expedition leader, doctor, radio operator & weather expert - on the stranded ship. Follow our entire story, with photos and special features Online .....
  www.cargolaw.com/presentations_casualties.html#Polar_Star.A1
• CSX World Terminals gets A New One ........ as it has been named as future operator of Pusan Newport, a new container terminal in Korean port of Pusan (3rd largest container port in the world), and will acquire up to 24.5% equity in the consortium of companies building the facility. CSX World Terminals, a subsidiary of CSX Corp., has signed an operations, maintenance & management agreement for the new terminal. Pusan Newport Co. will commence operation in early 2006.
• Shenzhen Hits Top 10 ........ as China's southern port of Shenzhen is now ranked in the world's top 10 Int'l container terminals. Shenzhen managed to ease into the top flight after handling 5 million TEU of freight last year, according to a Xinhuanet report. The container terminal has seen average year-on-year growth of 44% over the past 5 years and now serves 69 overseas routes with a monthly turnover of 417 ships.
• Panama Stays On Top ........ as the port of Colon (Cristobal) at the Atlantic end of the Panama Canal remained the busiest port in the Latin American & Caribbean region in 2001, according to statistics compiled by UN Economic Commission for the Caribbean & Latin America. The Panamanian port handled 1.21 million TEUs last year, down from 1.35 million TEUs in 2000.
• "E" ANZDL ........ as Australia-New Zealand Direct Line's new online tool allows shippers to automate the distribution of information & instructions required by vendors & consignees. ANZDL says shippers will be able to supply trading partners, including forwarders & consignees with access to shipping documentation & information, such as fumigation certificates, bills of lading, & arrival notices.
  www.myanzdl.com
• Where's OSK? ........ as MOL, Ltd. has officially changed the name of its North American container shipping agency and subsidiary from Mitsui OSK Lines (America) Inc. to MOL (America) Inc. -- saying that the name change is part of the MOL liner division's global branding campaign. In addition to all printed materials, the company's e-mail address has also been changed from mitsuiosk.com to molamerica.com.
• Major Coin ........ as the U.S. FMC has issued NVOCC -- Universal Logistic Forwarding Co. a US$1.23M fine for violating the 1984 Shipping Act. The FMC's Bureau of Enforcement began investigating the activities in Aug. 2000. The agency alleged that Universal Logistic Forwarding violated the Shipping Act by obtaining transportation at less than rates & charges applicable through the service contract of another NVO, Translink, to which it is not a signatory or an affiliate. The FMC said. "The carrier's obligation with respect to rate levels is to adhere to its published tariff. The commission is not in the business of monitoring the reasonableness of those rates & charges."
• New Queen A Go ........ as worlds biggest cruise ship, the 150,00 ton RMS Queen Mary 2, is being built by Cunard -- with 1st steel cut Jan. 24. The 344 meter-long ship will carry 2,800 passengers & should be launched in 2004. The ship will cost Cunard $750M (about £518m) to build & will be constructed at Chantiers de l’Atlantique shipyards in N.W. France. Rolls-Royce has signed a deal to provide engines for the super-liner -- offering a top speed of 30 knots. By comparison, our present RMS Queen Mary, now at permanent anchor in Long Beach ruled the seas at about 47,000 tons. The new Queen will truly be regal.
• 1st Electric-Powered LNG Vessel ........ as Samsung Heavy Industries has built a 147,000 cbm electric-powered LNG vessel, thus becoming 1st to build such a vessel. The vessel’s propellers are powered by electric energy. Turbine engines use naturally gasified LNG, which is stored in the vessel’s tanks. This development is a significant enhancement in the field of economical efficiency of propulsion systems in LNG vessels.
• This Month In U.S. Naval History ........ two events worth of note:
  • Jan, 1863 - CSS Alabama sinks USS Hatteras off Galveston in a pivotal naval struggle of the American Civil War.
  • Jan, 1944 - Aircraft from USS Block Island make 1st aircraft rocket attack on a German submarine as the Free World struggles to save itself from the shackles of permanent world domination by a Nazi conquest.

The Cargo Letter Cargo Damage Dispatches

Visit our new Vessel Casualties & Pirate Activity Database ......... where daily updates of these ship news are posted.
Stay up to date!
www.cargolaw.com/presentations_casualties.html

We're sorry, but there were so many sinkings, explosions, pirate attacks & hijackings, fires, cargo mishaps, battles on the water, weapons smuggling vessels, & other disasters at sea that we do not have room to print even the highlights this month. 100's of people lost their lives at sea this month!!

SPECIAL NOTE: There are dramatic new pictures at our special "Gallery of Cargo Loss" website feature.
www.cargolaw.com/gallery.html

Our Daily Vessel Casualties & Pirate Activity Database is updated for you twice daily! You can also search ship wrecks & losses of the past in our extensive index. Bookmark the site and visit every day! Thousands of visitors can't be wrong!
www.cargolaw.com/presentations_casualties.html

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.

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.