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The Cargo Letter
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THE CARGO LETTER [378]
Air & Ocean Logistics - Customs Broker News
30 June 2002
Good Sunday Evening 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."
All the news for June, 2002.
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
- Amtrak Back On Track? ........
as it announced an agreement June 28
night to get the US$200M needed to keep trains running through Sept. The deal
helps Amtrak avert the 1st systemwide shutdown in its 31- year history, which
had been threatened to begin next week. But the broad differences between the
railroad & the administration were evident even as the sides were jointly
praising the deal. The debate will play out over the next few months as
Congress writes a federal budget for the fiscal year that begins Oct. 1.
Amtrak insists it needs at least US$1.2Bn to run through Sept. 2003. The
administration is sticking by its initial proposal of US$521M, saying the
railroad must undergo significant reforms before seeking more. Whatever
Amtrak receives, it will have to use US$100M to pay back the administration
for a loan that is part of the short-term rescue package sealed June 28.
We're sure the check will be in the mail.
- Cobbler's Children With No Shoes ........
as U.S. vulnerability to
attacks using nuclear weapons or "dirty bombs" is worsened by its own poorly
funded, ill-coordinated efforts to stop the smuggling of radioactive
materials, the General Accounting Office said this month. Citing 181
incidents in which nuclear materials were smuggled over the past decade, GAO
said the 6 federal agencies involved do not work together & use different
methods of detecting radiation at border crossings. Investigators said the
U.S. has spent nearly US$90M on efforts that include outfitting more than 30
other countries with radiation detection equipment but has not installed the
same gear at U.S. border crossings. While The U.S. has given out this badly
needed gear -- GAO investigators found it had not always been put to
practical use. Examples include --a portal monitor on a road in Bulgaria not
open to traffic -- Portal monitors sat unused for 2 years in the basement of
the U.S. Embassy in Lithuania -- Protective suits & detectors were stored for
7 months in an embassy garage in Estonia -- Half of portal monitors provided
to Belarus were never installed or not operational -- Mobile X-ray vans idled
by cold weather & fuel costs in Russia & Kyrgyzstan.
- Customs To Remain? ........
as U.S. Customs Commissioner Robert Bonner
says that if the President's plan to combine 22 federal agencies into one
department of homeland security goes through, Customs would most likely move
into the new agency remaining intact. Bonner, in a press briefing in
Washington, said he anticipated the merging of Customs & the Immigration and
Naturalization Service into one group, under the title of "U.S. Customs &
Border Administration." As such, this new branch would focus on trade
facilitation & border security. Bonner added that Customs hopes to install
another 1,300 inspectors at U.S. points of entry.
- (For) ACES ........
as by fall of 2003, U.S. Customs Service hopes
to have 4 U.S. government agencies integrated into the early phases of the
its Automated Commercial Environment (ACE) & its Int'l Trade Data System. The
Customs' Modernization Program says that hopes to have the 1.] Federal Motor
Carriers Safety Administration, 2.] the Animal & Plant Health Inspection
Service, 3.] the Immigration & Naturalization Service and 4.] the Center for
Food Safety & Applied Nutrition -- all integrated into the initial stages of
ACE, Customs' computer-generated trade monitoring system. Commissioner Robert
Bonner said that additional funding is necessary to see the completion of
ACE, and that he was prepared to approach the Office of Management & Budget
to that end.
- You Can Still Be An ACE ........
as U.S. Customs says it has
reopened the application period for importers wishing to participate in the
1st phase test of the agency's computer-based trade monitoring system, the
ACE (see story above). The deadline for application has been moved to Aug. 1,
from Customs' original deadline of June 1, due to insufficient applications
received. Participants in this 2 year test, which begins in Oct, will
eventually be able to use the account management functions, such as account
access to their profile & transaction data via the Web portal. To
participate, contact Hedwig Lock at U.S. Customs Service, (703) 317-3657.
- Getting To Know Your Goods ........
as under a new rule proposed by
U.S. Customs for the Food & Drug Administration, importers would be required
to hold goods for 6 months after importation, or risk paying "liquidated
damages" of 3 times the value of the goods. The new regulation would extend
the conditional release period from 30 days to 180 days for all FDA-regulated
goods, including food, drugs, medical devices, cosmetics & some electronic
products. A Federal Register notice said the rule change is needed "to
provide a reasonable period of time for the FDA to perform its enforcement
functions," explaining that, under present law, the FDA must act within 30
days of release. Comments on the proposed rule are due by Aug. 6.
- Whose Your Customer? ........
as the Commerce Dept.'s Bureau of
Industry & Security has published a notice advising U.S. exporters of the
identities of 11 foreign companies for which the U.S. has been unable to
conduct requested pre-license checks or post-shipment verifications. The list
contains 9 entities in China, 1 in Malaysia, and 1 in the UAE. >> Chinese
companies are Power Test & Research Institute of Guangzhou, Civil Airport
Construction Corp., Xian XR Aerocomponents Co., Shaanxi Telecom Measuring
Station, S.B. Submarine Systems Co., Beijing San Zhong Electronic Equipment
Engineer Co., Huabei Petroleum Administration Bureau Logging Co., Yunma
Aircraft Mfg., and Daqing Production Logging Institute. Also on the BIS list
are Dee Communications M SDN. BHD of Malaysia, & Arrow Electronics Industries
of the UAE. The notice does not impose a new licensing requirement for
exports to those entities. Further information:
www.bxa.doc.gov
- Importer, Know Thyself ........
as U.S. Customs Service says the
Importer Self-Assessment program is now open to all importers who wish to
assess their own compliance with Customs laws & regulations. Participation in
the program entitles importers to receive entry summary trade data &
exemptions from all comprehensive compliance audits. In order to participate
in the ISA program, an importer must be a member of another
government-industry initiative, the Customs-Trade Partnership Against
Terrorism.
www.customs.gov/imp-exp1/comply/isa.htm
- Family Business ........
as U.S. Customs Commissioner Robert Bonner
has told industry executives that he would like to see an option paper
relevant to what constitutes "Customs business." Bonner said he has received
industry input to change rulings that prohibit licensed employees from
providing advice on customs issues to related subsidiary corporations. "A
change in the ruling seems to have some merit," Bonner said. "If the rule is
wrong, then it needs to be changed." Bonner added that the Office of
Regulations & Rulings should take the lead to generate an opinion paper to
look at changes that could be considered on these rulings, which limit what
services sister subsidiaries may provide for peer companies in customs
compliance issues. One industry executive in the group supported the change
or revocation of the 4 rulings that have been promulgated from Customs since
1999. "They pit U.S. Customs against the Modernization Act," said Leslie
Cazas, customs manager of Nissan North America. "These rulings fly in the
face of account-based management; the trade is unwilling to accept a 'don't
ask, don't tell' approach."
- Shared Family Businesses ........
as U.S. Customs has made a public
appeal for Hong Kong to accept inspection coordination for containers headed
for U.S. ports -- Customs' "Container Security Initiative." Meanwhile, U.S.
inspectors will screen cargo containers destined for the U.S. before they
leave Le Havre, France. The agreement with the French government allows U.S.
customs inspectors to be stationed at that port for the 1st time. Customs has
entered into similar agreements - aimed at improving cargo security at the
world's seaports - with Canada, Singapore, the Netherlands & Belgium. Last
year, around 108,300 cargo containers entered the U.S. from Le Havre, Customs
said. Customs hopes to place some officers at the Antwerp, Le Havre &
Rotterdam seaports in a few months.
- World Trade Center Disaster Bond Filing Deadline ........
as within the next week or so, Customs may publish in the Federal Register an
extension of the deadline to provide bond copies for those destroyed in the
World Trade Center on Sept. 11. Of the 35,000 lost bonds -- some date back to
the late 1890s. Under current extension the deadline is at 60 days from the
original May 13, 2002, publication date -- to July 12. Matthew L. Zehner,
Surety VP at Roanoke Trade Services believes the new deadline may be at 90
days -- to August 11, 2002. Meanwhile, use July 12.
www.roanoketrade.com/NYBond.htm
www.roanoketrade.com
- Rising Sun ........
as a surge in exports of cars, computer chips,
flat screen television sets & other hi-tech products, mainly to Asia,
underpinned a 715% rise in Japan's trade surplus in May from a year ago,
nearly doubling market forecasts.
- Unhappy Times ........
as the risks of terrorism, war & trade
conflicts, combined with growing macroeconomic imbalances & concerns about
corporate governance, have pushed the U.S. from 1st place to 5th in the world
in business environment rankings, the British think-tank Economist
Intelligence Unit (EIU) said June 27.
- Widening Gap ........
as the Commerce Dept. reports that the nation's
trade deficit during April widened to record as the U.S. imported more oil
from overseas & fuel prices surged. The nation's trade gap widened to a
seasonally adjusted US$35.9Bn from $32.5Bn March and $31.8Bn in Feb. The gap
was the largest since the government began keeping records on a monthly basis
back in 1992. Most economists on Wall Street were expected the trade gap to
widen to $32.2Bn during the month. Economists watch for the report not only
to gauge U.S. and overseas demand but also to calculate gross domestic
product. Imports are subtracted from economic growth, because they presumably
replace U.S. produced goods, while exports add to growth estimates. Logistics
costs as a percentage of the U.S. gross domestic product declined to 9.5% in
2001 from 10.2% in 2000.
- Trigger Happy ........
as Mexico has been sending more soldiers to the
U.S. border to combat drug smuggling, & some are raising alarms on the other
side by carrying their operations into U.S. territory. Even more worrisome,
critics say, are recent shootings involving an American tourist, a U.S.
Border Patrol vehicle & migrants. They fear the troops are overzealous & so
poorly trained that they are a hazard to innocent people in both countries.
Two of the shootings were on Mexico's side of the border, & the 1 on U.S.
territory occurred in a remote area where the border isn't marked well. It is
along such stretches that Mexican troops have strayed onto the U.S. side - as
American officers also occasionally cross into Mexico.
- Goodbye CATS? ........
as it is rumored that the Los Angeles County
Sheriff’s Dept. participation in Cargo Criminal Apprehension Team (Cargo
CATS) may be eliminated because of severe budget cuts imposed on the
department by the L.A. County Board of Supervisors. Elimination of Cargo CATs
in the greater-L.A. area will leave a small LAPD unit, smaller than Cargo
CATs, & without multi-jurisdictional scope. Cargo CATs is a unique team of
highly experienced investigators representing city, county & state law
enforcement agencies. Formed in 1990 by Sheriff Sherman Block, Cargo CATs is
one of only a handful of multi-agency teams in the U.S. dedicated exclusively
to targeting cargo thieves. During 1997, Cargo CATs investigators made 79
arrests, cleared 14 cases and recovered US$9.6M in stolen freight &
equipment. Since it was formed in 1991, the team has made 871 arrests,
cleared 720 cases & recovered US$126.5M in stolen cargo.
- UPS Gets A Pal ........
as it has teamed with PayPal, an Internet
payment service, to integrate online payments with digital shipping tools.
PayPal automatically sends payment to the seller at the close of a
transaction & puts customer shipping information into the shipping label as a
one-step process. The seller is instantly paid for the item & receives all of
the data to print a shipping label. The buyer receives an e-mail message with
a linked tracking number confirming the shipment of the product and an
expected date of delivery. PayPal became well known as the favoite payment
option on eBay.
www.PayPal.com
- Integres Global Logistics Gets Fritz ........
as it named Lynn C.
Fritz, former chairman & CEO of Fritz Cos., to its board of directors.
Fritz led the formerly family owned customs broker and freight forwarder
until May 2001 when it was acquired by UPS. During his tenure, the company
grew from a domestic documentation company to a global organization of 10,000
employees in 120 countries. He is also the founder of the Fritz Institute,
which researches disaster relief logistics. Integres is a Rancho Cordova,
Calif.-based logistics company formed last year.
- Fed Ex Crashes The Tower ........
as FedEx Trade Networks Inc., the
FedEx subsidiary, will reorganize, implement new branding strategy with its
Tower Group Int'l Inc. subsidiary. Tower will change its name to FedEx Trade
Networks Transport & Brokerage Inc., effective July 8, and will continue to
offer customs brokerage, Int'l freight forwarding & other shipping services.
FedEx Trade Networks will also create a new subsidiary, FedEx Trade Networks
Trade Services Inc., which will incorporate the duty & tax data services of
current subsidiary, Worldtariff. The new subsidiary, also to kick off July 8,
will offer Int'l consulting services & introduce a set of integrated shipping
resources known as Global Trade Tools. In other news, FedEx is now the
"Official Shipping Company" of the PGA Tour & Senior PGA Tour.
- Security In Numbers ........
as the Security Cargo Network, a newly
formed freight forwarder network, plans to hold its 1st meeting in Istanbul,
Turkey, Sept. 8, in conjunction with the Int'l Federation of Freight
Forwarders Assns.' (FIATA) annual meeting. The meeting's purpose is for FIATA
members to become acquainted with the services offered by the Security Cargo
Network. Nominations will also be solicited for the group's Technical
Industry Advisory Panel. Security Cargo Network was started in May -- has 23
ocean & air forwarder members -- 43 offices in 19 countries. New members are
sought.
- Not This Year ........
as Panalpina Group, the Swiss forwarding &
logistics services provider has postponed its initial public offering. Ernst
Gohner Foundation, the Panalpina Group's sole shareholder, said it decided
not to go ahead with the IPO this year, "as it considers that the stock
market situation is currently unfavorable for a successful share flotation."
Panalpina had announced its plan for the IPO at its annual media conference
in Zurich a few weeks ago.
- Not Next Year ........
as Pacer Int'l Inc., a provider of
transportation & logistics, has now begun an initial public offering of 14
million shares of common stock at US$15 a share. According to the company,
Pacer itself is selling 9.25 million shares, & 4.75 million are being sold
"by certain institutional stockholders." The net proceeds to the company of
the offering will be used to repay outstanding borrowings. Credit Suisse
First Boston Corp. & Bear Stearns Cos. are the lead underwriters. Shares have
started to trade on Nasdaq under the symbol PACR. Pacer, based in Concord,
Calif., is selling the public a 38% stake, with about 37 million shares
outstanding.
- Haz Mat Online ........
as the Research & Special Programs Admin. of
the U.S. Dept. of Transportation reports online registration for year
2002-2003 hazardous materials program begins July 1 -- allowing registrants
to make payments at any time, & receive an immediate acknowledgment of
payment. The fees are US$300 for small businesses, & US$2,000 for others. The
hazardous materials registration funds the DOT's Hazardous Materials
Emergency Preparedness grants program, which supports hazmat emergency
response training & planning activities by state, territory, tribal & local
governments. Registration with the department may be completed by e-mail to:
register@rspa.dot.gov, or at (800) 942-6990.
- Keep The Motor Running ........
as the U.S. trucking industry has
petitioned the White House for a delay in implementation of new diesel engine
emissions standards due to go into effect on Oct. 1, 2002. In a letter to
President George Bush, 345 motor carriers, all members of the American
Trucking Assn.s (ATA), said the type of new engines required by the U.S.
Environmental Protection Agency (EPA) remain untested, unproved, and pose a
serious threat to the industry's ability to continue to move America's
freight efficiently & to keep the U.S. economy going. Normally, engine
manufacturers provide fleet owners with several prototype engines for
extensive field-testing, each involving a year or more of operation over
hundreds of thousands of miles. However, say the motor carriers, with less
than 4 months before the deadline, there is no time left for them to
thoroughly test the new engines. The limited testing that has occurred to
date has prompted serious questions about the performance, reliability, &
maintenance of the new engines. So far, the few 2002 test engines available
have demonstrated a higher breakdown rate, decreased fuel economy, much
higher operating temperatures, a doubling of normal engine oil consumption,
and have also produced unexpected wear & tear on other under-the-hood
components.
- Steel Exclusions ........
as the U.S. Dept. of Commerce announced a
list of steel products that will be excluded from the Section 201 Safeguard
Measures. In response to requests from domestic steel-consuming industries &
foreign producers, the Dept. of Commerce exempted 61 additional products
because they were not produced in sufficient quantities by domestic
manufacturers. The additional products from a list of 470 requests will be
excluded prior to a deadline of July 3 set by President Bush.
www.ustr.gov/sectors/industry/steel.shtml
- Follow The Freight ........
as NaviTag Technologies LLC, a provider
of cargo security & tracking solutions, will develop a "proof-of-concept"
prototype to track global cargo. The company received US$875,000 from the
U.S. Dept. of Transportation's Port Security Grant Program to build the trial
unit. NaviTag has designed a portable, battery-powered tracking device that
uses GPS satellite transmissions to provide location & alert data. About the
size of a paperback novel, the unit attaches to the locking bar on the
exterior of a container, and transmits positional information every 4 hours
to a secure Web-accessible database. Upon arrival at destination, the unit
can be deactivated, removed, & reused on another shipment.
- Follow The Freight ........
as "Operation Safe Commerce" (OSC), a
public-private partnership aimed at tighter cargo container safety in the
supply chain, has successfully completed its 1st test run. A container loaded
with 400,000 tail lamps arrived by truck in Hillsborough, NH, on June 7,
completing the test. The shipment left an Osram-Sylvania plant May 22 in Nove
Zamky, Slovakia, & was trucked across the border into the Czech Republic, and
onto the port of Hamburg, Germany. From Hamburg, it was transported via ocean
container to the Port of Montreal, where it arrived June 3 & was eventually
trucked to Hillsborough. Throughout the entire process, OSC participants
reviewed the cargo's entire route through the use of a global positioning
system transceiver, data logger & intrusion detection device. In OSC,
point-of-origin security, in-transit transparency & data query capabilities
allow the movement of legitimate containerized cargo, while preventing
terrorists from inserting weapons of mass destruction into the supply chain.
- Follow Danzas North America ........
as it will relocate its corporate
headquarters to Newark, NJ, effective July 1. The provider's principal U.S.
office had been in Darien, Conn. Danzas will keep its administrative
operations in Darien. The company's North American Information Technology
Group will remain in Renton, Wash.
- Logistics.com Blossoms ........
as it said the procurement via its
systems reached US$8Bn in freight transportation services, resulting in more
than US$500M in hard dollar savings for customers. Since 1995, 35 Fortune 500
shippers & 3rd-party logistics providers, among other customers, have adopted
Logistics.com's OptiBid to reduce supply chain costs with transportation
bidding process.
- Three's Company ........
as 3 Union Pacific freight trains collided
June 19, injuring 4 crew members & igniting a fire that shut down a Nebraska
highway. An empty westbound coal train was rear-ended by another empty coal
train. An eastbound train carrying auto parts on a nearby track somehow got
entangled in the wreckage, possibly by running into a derailed car. The
trains each had 2 locomotives; of the 265 cars, 29 were destroyed. Some of
cars piled up on top of each other, & one lay across part of U.S. Highway 30,
which was closed. U.S. derailments up 27% in last 5 years.
- Salsa Smash ........
as the El Paso Times reports a grade crossing
collision between a Burlington Northern Santa Fe train carrying 2 tanks of
liquid chile & a truck laden with onions June 12 in southern New Mexico. No
injuries, but the truck spilled its cargo. Emergency crews rushed Tostadas to
the scene.
- Evergreen Marine Corp. (Taiwan) Ltd (EMC)
UP as despite lower revenues
for the year to last Dec. 31, after-tax profit rose 35% to US$50.1M.
**FedEx. UP in 2002, through May, as record operating profit rose 23% to
US$1.32Bn from $1.07Bn a year earlier.
- Lufthansa.
UP as it expects E400 million profit in the current fiscal
year -- after E28 million year 2001 -- is forecast by the company.
- Pacific CMA Inc.
DOWN with a net loss for 1st quarter 2002 of $18,830,
due to increases in overhead expenses as a result of being a new public
entity -- 1st quarter 2001 saw net income of US$109,000.
- United Arab Shipping Co.
UP as net profit improved to US$41.5M last year,
from US$40.8M in 2000.
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
Written from wire stories, the Associated
Press, Reuters, Hong Kong Shipping News Lloyds & other world sources.
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