The Cargo Letter
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The Cargo Letter |
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A Not-So-Good Tuesday 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."
All 29 U.S. West Coast Ports Are CLOSED!
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Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker attorneys at LAX.
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OUR Top Story...
1. U.S. West Coast Shut Down
Delay - Indefinite - Grinch On The West Coast?
OUR "A" Section: Trade,
Financial & Inland News
2. Freight Forwarder Trade Briefs
3. The Cargo Letter Financial Page
OUR "B" Section: FF World
Air News
4. Freight Forwarder World Air Briefs
OUR "C" Section: FF World
Ocean News
5. FF World Ocean Briefs
6. The Cargo Letter Cargo Damage Dispatches
Back By Popular Demand...
OUR "D" Section: FF in Cyberspace
7. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The
Forwarder/Broker World
8. New U.S. Transport Related Legal Cases
Delay - Indefinite
Grinch On The West Coast?
The U.S. West Coast is now idle, as all 29 of its ports are again shut down for a 2nd time in 3 days -- from 6pm on Sun. Sept. 29. This coastwide labor disruption could cost the U.S. economy US$1Bn per day -- US$19.4Bn at 10 days -- with no end in sight.
The Recent History
All ports had been shut down from Fri. Sept. 27 by the Pacific Maritime Assn., which represents the shipping lines, until Sun. morning, Sept. 29 -- A 38-hour "cooling-off period," which would immediately curtail flow of critical Christmas Season goods across the U.S.
The PMA had accused the Int'l Longshore & Warehouse Union (ILWU) of slowing down the pace of work as a tactic to gain leverage in labor talks. After 5 months, contract talks crumbled last week over the question of how to implement new technology which PMA intends for modernization of the waterfront. The union said it could accept short-term job losses from increased efficiency, but wanted guarantees that positions created by new computer tracking systems would be union-covered. A go-slow work attitude followed at the ports.
Sources outside the PMA & ILWU confirmed that work indeed had slowed -- some ports had only 50% productivity or less.
Port congestion mounted as the ILWU issued a directive Sept. 26 telling the 10,500 workers it represents at all 29 major Pacific ports "to work in strict accordance with all safety & health rules - taking no overtime." Thus the work "slow down" -- thus the PMA 38-hour "lock out." The Union learned of the lockout Sept. 27 morning from negotiators, in talks which had become acrimonious.
PMA SAID: "We will not pay workers to strike."
All ports shut down at 6pm, Fri. Sept. 27. Major disruption followed as many ships were held at dock from their rotations, while countless others anchored offshore (over 12 off L.A./Long Beach alone Sept. 27) -- port truckers circled, confused -- pending news.
PMA SAID: "The PMA Board regrets that union-initiated slowdowns made this decision necessary," a PMA statement said Sept. 27.
ILWU SAID: "The PMA walked out of negotiations after its CEO Joseph Miniace launched into a tirade, attacking the union as an institution & saying he doesn't want to deal with it anymore," the ILWU responded in a statement later on Sept. 27.
On Sun. morning Sept. 29, the 29 West Coast ports reopened, with talks set to continue Sept. 30. But the shipping lines said productivity just "fell off the cliff," with many workers showing up late for the shift. A union process of "random assignment" sent many workers to other than their normal jobs.
"It's like a plumber showing up to roof your house," said a manager for PMA's San Francisco area on Sept. 29. "Aside from the production issue, there are certainly safety issues."
Thus, all 29 U.S. West Coast ports went dark, again.
CURRENT STATUS: Pacific Maritime Assn. said it will bar workers from the docks until the ILWU agrees to extend a lapsed contract while talks toward a new agreement continue. But ILWU said it will not budge until the lockout is ended. Just from the 1st 38 hours of stoppage we expect cargo delivery delay, perishable commodity loss, rail congestion, & increased theft opportunities. The PMA & ILWU may meet with federal mediators tomorrow at San Francisco.
DANGER: There are many unattended loads on the streets, truckers having no port access. Unload containerized cargo back into your warehouse! It's a very small price to pay.
Looking out at the Los Angeles/Long Beach port complex today from the windows of The Cargo Letter -- one saw a forest of idle cargo crane booms pointing skyward. What's next in this busy Christmas season? The White House is concerned about the effect on the struggling U.S. economy but said it has no immediate plans to break impasse by declaring a national emergency. This could get much, much worse. Merry Christmas?!
Learn The Viewpoints & Latest News:
www.pmanet.org/
www.ilwu.org/main.htm
Freight Forwarder Trade Briefs
The Cargo Letter Financial Page
Slow Rebound......
as driven by a narrower trade deficit than the previous quarter, the U.S.
economy grew by a 1.3% annual rate between April & June, & is
expected to grow threefold in the following quarter, the Commerce Dept. said
Sept. 27. But Commerce also reported that the number of orders placed for
new durable goods in the U.S. fell 0.6% in Aug, following up a revised 8.6%
jump the previous month.
Good-Bye
Consolidated Freightways...... as the 73-year old freight transportation
company & nation's 3rd largest less-than-truckload carrier, discontinued
operations effective Sept. 2 and filled for Chapter 11 bankruptcy.
Operations of the company's CF AirFreight & Canadian Freightways, Ltd.
subsidiaries are continuing normally, and their employees will not be
terminated as a result of this action. Approximately 15,500 employees are
impacted by the CFC shutdown. Of these, more than 80% received termination
notices. The remaining management & supervisory positions will be phased
out in an expeditious shutdown of the company. In 1st quarter 2002,
Consolidated lost US$36.5M on US$463M in revenue. The company lost US$104.3M
last year & US$7.6M in 2000. The company had 350 terminals & 30,000
vehicles across the U.S., Canada & Mexico. This was a shock.
U.S. Takes A Hit...... as
the WTO in Aug. issued a decision confirming the European Union's request
for more than US$4Bn in countermeasures (100% retaliatory duties) in its
dispute with the U.S. over the U.S. Foreign Sales Corporations law. Those
duties will be assessed on U.S.-made products exported to the EU &
classified in certain tariff provisions appearing on the final sanctions
list. The European Commission is accepting comments until Nov. 12 from
interested parties regarding the final sanctions list, including requests to
remove specific products from the EU's proposed list of products subject to
retaliatory duties. (see new case in Section: 8. New U.S. Transport Related
Legal Cases, below.) The list of tariff provisions may be downloaded from
Katten Much Zavis Rosenman's Web site: http://www.kmzr.com
Not so Fast! ...... as
the recent & highly controversial U.S. Customs' ruling calling for
filing of cargo manifests prior to loading overseas was issued too quickly
& without proper dialogue with Congress, other government agencies &
trade, said Carl Bentzel, senior counsel to the U.S. Senate Committee on
Commerce, Science & Transportation. "It was a shocking
surprise," Bentzel said of Customs' proposed rule. Even more surprising
was that the agency proposed a ruling without discussing the issue with
congressional committees specifically charged with drafting port security
legislation, said Bentzel, speaking at a conference of the National Customs
Brokers & Forwarders Assn. of America in Washington last week. NCBFAA
says the proposed rule is unworkable, unenforceable, & would only serve
to interdict smooth flow of legitimate commerce. Last month Customs proposed
a ruling requiring carriers & NVOCCs to transmit cargo manifests 24
hours prior to loading. Customs said it needs the information to ensure that
terrorists will not smuggle weapons of mass destruction within cargo
containers bound for America. NCBFAA says it would participate with Customs
to find other workable measures. One of the main issues NCBFAA members have
with the use of manifests is that they believe competitors, or even
terrorists, could get access to such information. The proposed ruling would
also eliminate use of generic cargo descriptions on manifests, such as
"freight of all kinds" (FAK) or "said to contain." There
seems little understanding of NVOCC industry practices, such as co-loading.
Who Goes There?...... as
the U.S. Transportation Security Administration said it will soon begin
testing identification cards for transportation workers at several cities.
The idea of ID cards for transportation workers, including truckers, has
been proposed as a way to ease delays at ports, airports & borders. The
new cards will be tested at airports in Los Angeles & Philadelphia and
at the ports of Long Beach (if it is open), & Wilmington, Del. TSA chief
James Loy said that the agency wanted to produce the prototype cards almost
immediately & that the ID card technology would be the basis for a
"registered traveler program."
REMINDER FROM LAST MONTH:
C-TPAT Open To Intermediaries ........ as U.S. Customs will now accept
applications from air freight consolidators, ocean transportation
intermediaries (OTIs), customs brokers, & NVOCCs. C-TPAT was started in
April to enhance supply chain security through building relationships
between government & industry. The program calls on businesses to
establish policies enhancing their security practices & those of their
business partners. Prospective participants are required to fill out a
supply chain security profile questionnaire. FMC Chairman Steven R. Blust
last week again urged interested forwarders & brokers to join now. Sign
up today as did Elite Int'l Transportation Inc. www.customs.treas.gov/enforcem/tpat.htm
Lloyd's of Singapore?
......as a Singapore government appointed panel set up to recommend action
to boost the transport & logistics sectors says the Asian city state
should aim to overtake London as an Int'l maritime center within 5-10 years.
According to 'Singapore Shipping Times," the Working Group on Logistics
says Singapore should focus on going beyond its physical capacity in
maritime transport to develop the higher value-added, or 'soft' portion,
including financing, insurance & arbitration. The working group outlined
what it called the 'London-plus development framework.' The group envisages
building on Singapore's current strengths as a transshipment hub, ship
registry, ship repair, bunkering & logistics center to boost the
transport & logistics services sector which it notes forms the backbone
of London's maritime business. When asked whether it was possible for
Singapore to overtake such an entrenched Int'l maritime center with
organizations like the Int'l Maritime Organization (IMO) & the Lloyd's
of London underwriting market as key cornerstones, the working group's
chairman Wong Kok Siew said: 'We have to invite them to come here." We
do not doubt the potential of this project.
Getting Strait...... as
Taiwan's Cabinet has approved a draft law that could help pave the way
towards ending a 5 decade ban on direct shipping & air links with China.
The legislation, which allows public foundations to negotiate with Beijing
to end the ban, could also help start official talks with China.
OK To Take Schenker
...... as the European Commission has authorized the proposed takeover of
Stinnes AG, German parent company of Schenker, by the German state-owned
rail operator Deutsche Bahn AG. Deutsche Bahn announced in July a bid to
acquire the Stinnes logistics group for US$2.4Bn. Stinnes, including its
transportation arm Schenker, is one of the largest logistics &
forwarding groups in Europe.
Kuehne & Nagel - Phase 2......
as Kuehne & Nagel is the 1st logistics provider to be awarded Phase 2
quality accreditation from Cargo 2000, an interest group of air carriers
& forwarders. While Phase 1 of the Cargo 2000 initiative focused on
monitoring airport-to-airport processes, Phase 2 focuses on the planning
& controlling of the entire door-to-door process chain. The new system
calls for information technology-supported controls & measures of each
transaction within the process chain against the route map planned for every
consignment by the logistics provider. Cargo 2000 is an interest group
affiliated with the Montreal-based IATA. >> In other K & N news,
the Switzerland based company has acquired Agentes Nacionales ANASA S.A., a
customs broker & forwarder in San Jose, Costa Rica. -- employs 22 people
at 3 offices.
www.iata.org/cargo/wg/cargo2000/main_public.asp
Katoen Natie Buys Canadian ..........
as Belgian logistics group KTN acquired the Canadian logistical group
Guilbault, a family owned company, which operates under the brand name Servi
logistix.
United Shipping Adds SST
......... as the Denver-based network of independently owned freight
forwarders & customs brokers, has added a member, SST Int'l in Los
Angeles. United Shipping has 77 members in 44 countries, with 150 offices
worldwide.
www.unitedshipping.com
Goodbye Emery Customs Brokers
.......... as it is in the process of changing its name to Menlo Worldwide
Trade Services.
Phoenix, Indiana?
......... as Phoenix Int'l Freight Services has opened its latest branch
office in South Bend, Indiana.
Needing A Bus Pass
........... as the U.S. House Appropriations Committee has approved a
funding plan for Amtrak that critics say would force the railroad to
eliminate routes or even shut down. The plan would give the struggling
railroad US$762M next year, far less than the US$1.2Bn the Senate has
approved and Amtrak says it needs. Rep. Harold Rogers, R-Ky. and chairman of
the panel's transportation subcommittee, said giving Amtrak that much money
would reward mismanagement. Every time a passenger boards a train, he said,
"Uncle Sam writes a check for US$138.71, on average." David Gunn,
Amtrak's CEO, said in a letter to Rogers that US$762M is not enough.
"Amtrak will run out of money early in 2003, and we will again be faced
with another shutdown crisis," Gunn wrote. Amtrak received US$826M last
year, including an emergency loan of US$100M over the summer. The Bush
administration is sticking by its initial proposal of US$521M, saying the
railroad must undertake significant reforms before seeking more. Amtrak was
formed in 1971 to relieve freight railroads from cash-draining
responsibility of passenger service. The plan was swell, as it has struggled
ever since to meet expectations that it attempt to break even. Amtrak serves
more than 500 communities in 46 states over a 22,000-mile route system.
About 65,000 people ride Amtrak each day, roughly half in the busy
Boston-New York-Washington corridor.
www.amtrak.com
New Equipment For Amtrak?
......... as half a century ago, Nevada was given a rickety, gift-laden
boxcar - one of 49 "Merci" boxcars sent by France to U.S. states
in gratitude for U.S. help during World War II. Now, after decades of
neglect, the old military boxcar is in line for restoration at the Nevada
State Railroad Museum - provided enough money can be raised. Shipped across
the Atlantic by freighter, the boxcars, one for each state at the time plus
one for District of Columbia & territories of Alaska & Hawaii,
arrived in the U.S. in Feb. 1949 - repaired, freshly painted & decorated
with the coats of arms of the 40 provinces of France. The rail cars were
filled with 250 tons of gifts that ranged from toys, children's drawings
& ashtrays to rare paintings, a Louis XV carriage, silk wedding dresses
& a church bell. Just a few years before, Allied soldiers arriving in
France were packed into the boxcars & sent into Germany to fight Nazi
forces.
www.nsrm-friends.org/nsrm56.htm
Old Dominion, New Product .........
as the LTL carrier has a new air freight line-haul service, OD AIR EXPRESS.
Old Dominion Freight Line's new air freight line-haul service product will
initially offer service to 51 airport locations nationwide www.odfl.com
New Tie Down Regs
........ as the U.S. Dept. of Transportation's Federal Motor Carrier Safety
Admin. (FMCSA) has announced a requirement that all interstate commercial
motor vehicles (CMV) comply with a new single set of performance standards.
Meeting these standards will help to ensure that all CMV loads are properly
secured & to reduce the number of accidents caused by cargo shifting or
falling from trucks. This final rule sets new cargo securement standards
based on the North American Cargo Securement Standard Model Regulations.
Canada & Mexico also are considering adopting provisions of the model
regulations. The 3 countries could have compatible cargo securement
regulations for heavy trucks. The final rule clarifies how to determine the
working load limit of cargo securement systems & the way carriers should
use tiedown devices to secure cargo so it does not leak, spill, blow, or
fall from a CMV. There are commodity-specific securement standards for
transportation of logs, dressed lumber, metal coils, paper rolls, intermodal
containers; cars, light trucks & vans; heavy vehicles, equipment &
machinery; flattened or crushed cars; roll-on/roll-off containers; and large
boulders. Motor carriers have until Jan. 1, 2004, to comply. Training
materials are being developed & will be available from the FMCSA Final
rule effective Dec. 26, 2002 & can be viewed by searching for docket
number FMCSA-97-2289. Next month legislators will tackle a law prohibiting
truckers from driving 16ft permit loads through 14ft bridge openings. http://dms.dot.gov/
Trucking Army ........ as
1st volunteers in New York's "Trucking Army" were trained &
certified in Albany on Sept. 26th. A group of New York State Police
officers, New York Dept. of Transportation employees, & safety directors
from state-based companies, were trained under a federal initiative called
"Highway Watch." The program is administered by the American
Trucking Associations. After the initial session, the New York State Motor
Truck Assn. & the New York State Police, will continue to train New
York-based professional truck drivers to observe & report national
security & highway safety threats to ensure that no truck is used as a
weapon.
It's The
Passengers Who Are Supposed To Be Late ......... as a London train
engineer was forced to sprint 100 yards along the station platform to catch
his train after it decided to start its journey without him on Sept. 17.
"The ticket-collector climbed on & seconds later the train started
moving. When I looked out the window I noticed the driver still on the
platform. He ran as fast as he could past my window, then jumped on the
train & stopped it," passenger Ann Sutton told the London Daily
Telegraph.
Buggy Wickets? .........
as Australia's hard-line quarantine inspectors barred entry to 2 boxes of
"hallowed" turf from London's Lord cricket ground on Sept. 20,
fearing that they might be a haven for bugs & pests. Two souvenir sods
of Lord's grass, ordered by Australian cricket lovers, arrived through the
mail in boxes bearing the customs declaration "sporting (cricket)
goods." But quarantine officials dug their heels in & refused to
admit them. Bad show, what!
The Cargo Letter Financial Page
Alpine Air Express, Inc. DOWN
as net income for 3rd quarter was US$134,789, or $0.01 per diluted share,
compared to net income of US$617,206, or $0.06 per diluted share, in the
prior year's 3rd quarter.
FedEx Corp. UP with
earnings of US$0.52 per diluted share for quarter ended Aug. 31, compared to
US$0.36 per diluted share reported last year. Net income of US$158M, up 45%
from last year's US$109M. Wow.
Interpool, Inc. UP with
adjusted Income from Continuing Operations for 2nd quarter of 2002 was
US$8.1M. Interpool will pay a cash dividend of US$.055 cents per share for
the 3rd quarter of 2002 -- payable on Oct. 15, 2002 to shareholders of
record on Oct. 1, 2002. The aggregate amount of dividend expected to be
approximately US$1,505,000. Interpool is the corporate sponsor of The Cargo
Letter archives.
Neptune Orient Lines, parent
of APL, DOWN with a net deficit of US$151M for 1st half 2002 -- worst
result since 1998.
P&O. DOWN with a loss
in 1st half 2002 of £44.2M (US$68.95M) , against profits of £90M a year
ago -- due to on steep loss at P&O Nedlloyd Container Line.
Panalpina Group. UP as
1st-half net income improved 10.5% to US$34.6M, despite depreciation of key
currencies.
Roadway Corp. DOWN with
net income of US$6.9M, or 36 cents a share, compared with US$8.2M, or 43
cents a share, a year earlier. Business volume increased since Consolidated
Freightways Corp., another LTL carrier, ceased operations in early
Sept.
UTi. UP as net income
rose 43% to $7.7M in 2nd quarter.
Zim Israel Navigation Co.
DOWN with loss of US$14.6M for the 1st half of the year, as compared with
earnings US$12.1M in same period 2001.
Blacker Tires ..........
as U.S. trucking companies are generally expected to post higher 3rd-quarter
2002 profits, aided by improving demand & the recent round of industry
consolidation. The catalyst is this month's closure of Consolidated
Freightways which put an estimated 15% share of the long-haul market up for
grabs.
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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