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

• Japan, Hong Kong & Singapore Sign On ......... as U.S. Customs & these nations have signed an agreement to allow participation on a pilot basis in Customs' Container Security Initiative (CSI). Started in Jan, CSI is a program designed to prevent smuggling of terrorist weapons in ocean-containers, by screening "high risk" containers prior to departure. U.S. Customs officers will be stationed on a pilot basis at the ports of Hong Kong, Singapore, and at Tokyo, Nagoya, Kobe & Yokohama. These ports are among the top 20 "mega-ports" of the world. About 200 million ocean containers move between the world's top seaports, and nearly 50% of the value of all U.S. imports arrives by container each year. Last year, nearly 560,000 sea cargo containers entered America from the port of Hong Kong alone. The U.S. is also implementing CSI with Canada, the Netherlands, Belgium, Germany, & France. Customs now in discussions with several other nations, including countries in Europe & Asia. 
  
  
• Cheap Seats .......... as the Marine Money Conference in Singapore was told last week that it costs only about US$40 cents to ship a pair of sneakers from Taiwan to California by containership, and about US$70 cents to get a VCR to the U.S. from Hong Kong. Flemming Jacobs, the outspoken president & CEO of Neptune Orient Lines said, "the impact of ocean shipping rates on product landed costs is very small. Therefore you shouldn't look to these rates continuing to drive major cost efficiencies for the exporters & importers in Int'l trade," Jacobs said. "Instead I suggest you look at the result of the impact that a well managed supply chain can achieve -- and at the business value it can generate." He said customers are changing their focus from "just beating down freight rates" to seeking improved logistics tools. Such logistics tools can provide process controls, pipeline visibility, low costs, seamless handoffs & a reliable network. Neptune Orient Lines reported a US$72M loss on its container-shipping arm in the 1st half of the year, and an US$11M deficit on APL Logistics. "Again & again it is said that the big increase in capacity is the mother of all problems," Jacobs said. He admitted that ship operators have not been very good at managing capacity. Well, yes.
  
  
• Good-Bye Int'l Shipping Lines ......... as this carrier in Portugal since 1986 has gone into receivership. ISL had offered direct services from Portugal to Angola, West Africa and Cape Verde, off West Africa. Now, Nile Dutch Africa Line started a 20-day service mirroring the former ISL service calling at Antwerp, Leixoes, Lisbon, Mindelo, Praia, Sao Tome, Luanda, Cabinda, Antwerp, Leixoes & Lisbon. 
  
  
• Hyundai Treads Water ........ as it has laid off 7 of its 16 top executives, only 2 weeks after announcing appointment of a new president at the heavily indebted Korean shipping group. Hyundai Merchant Marine said the management revamp forms part of the group's restructuring. Hyundai has recently sold its car-carrier division to a joint venture led by Wilh. Wilhelmsen ASA & Wallenius Lines AB to reduce debts. 
  
  
• A.P. Moller Is Torm Over New Project .......... as the parent company of Maersk Sealand & Safmarine, has acquired the niche African liner operator Torm Lines from A/S Dampskibsselskabet Torm, a diversified Danish shipping company. Terms not disclosed. Torm Lines is a long-established operator of container & breakbulk direct services from the U.S. Gulf & East Coast of North America to West Africa. It operates 4 multipurpose vessels on a direct transatlantic service & 4 vessels on a feeder service along the coast in Africa. www.cargolaw.com/2001nightmare.heavymetal.html 
  
  
• BIMCO 4 Ply Clause To Simplify GA ......... as the Baltic & Int'l Maritime Council has urged the Int'l shipping community to adopt a standard general average "absorption clause" that it has defined. A general average absorption clause is a provision, inserted into a hull insurance policy, that requires the insurance underwriters to "absorb" up to an agreed amount, a claim in general average that the insured shipowner has against another party, most commonly cargo interests. BIMCO hopes that its standard clause initiative will help to promote a broad move away from declaring general average for small & uneconomic claims in all sectors of the industry. "The Standard Absorption Clause is designed to be of benefit both to shipowners & insurers by avoiding the time and expense associated with pursuing small general average claims," BIMCO said. One of the disadvantages to shipowners of declaring general average is the risk of delay at the discharge port, because general average security must be in place prior to the delivery of the cargo. In recent years, insurance underwriters & others have called for the general average system to be abolished or substantially amended. The Comité Maritime Int'l is reviewing the provisions of the York-Antwerp Rules, which define the general average rules. This is a great idea. 
  
  
• Vessel Owners To Pay ......... as it will cost far more for their P&I cover next year according to North of England P&I club underwriting director Paul Jennings. He told NE Club members in Dubai recently that all clubs would need to consider making significant general increases at the Feb. 2003 renewals to maintain financial stability with owners, who saw P&I cover increase by about a quarter this year, facing at least similar rises. He said that the Int'l Group P&I clubs would need to avoid any further erosion of their free reserves at the next renewal following last year's 40% average underwriting deficit. No clubs have yet to announce general increases for 2003, but some anticipate it will be at least similar to the average 25% increase set last year, plus reinsurance increases where appropriate. 
  
  
• "Home Repair" Could Again Be Free .........as the U.S. House Ways & Means Committee has approved a provision to eliminate a Customs duty on U.S.-flag vessel repairs in its proposed miscellaneous trade bill. The 50% ad valorem duty, which covers nearly all parts, supplies & equipment used in routine repairs performed by crewmembers, has added thousands of dollars to the operations costs of U.S.-flag vessels. The initial purpose of the duty was to encourage U.S.-flag vessel operators to make repairs in U.S. shipyards. On April 25, 2001, Customs extended its interpretation of the duty to include vessel repairs & maintenance by American seafarers on the high seas. 
  
  
• Pushing Up East .......... as the 14 major Pacific carrier member lines of the Transpacific Stabilization Agreement said they intend to raise base freight rates across the board & implement other provisions in their 2003-2004 tariffs & service contracts for the Asia to U.S. trade -- raising base freight rates by US$700 per FEU for all-water service to the U.S. West & East coasts, & by US$900 for all intermodal inland point & cross-country minilandbridge shipments. The increases will take effect upon expiration of current contracts or May 1, which ever is sooner. There will also be proportionate increases for other equipment sizes & cargo otherwise rated, plus new terminal handling charges. A peak-season surcharge of US$300 per FEU will be applied from June 15 through Oct. 31, 2003. Transpacific volumes rose 17.5% in the 1st half of 2002 to nearly 1.9 million FEUs. July’s year-on-year cargo volume is up 24%. About 60% of the trade moving from Asia to the U.S. is from China, including Hong Kong. 
  
  
• Pushing Up West ........ as carriers of the Westbound Transpacific Stabilization Agreement plan to raise dry cargo rates from the U.S. to Asia by US$200 per 40-foot container, effective Nov. 1 for wastepaper, Dec. 1 for shipments of cotton, & Jan. 1 for all other non-refrigerated commodities. Member carriers have individually set a volunteer target to raise chilled cargo rates by US$600 per 40-foot container, by April 1. Members of WTSA, are APL, COSCO, Evergreen, Hanjin Shipping, Hapag-Lloyd, Hyundai, "K" Line, Mitsui O.S.K., N.Y.K. Line, OOCL, P&O Nedlloyd & Yangming. 
  
  
• Pushing Up The FMC ........ as the commission has announced its fact finding investigation into practices of Transpacific Stabilization Agreement members covering the 2002-2003 service contract season, with the Transpacific Stabilization Agreement & its members. The investigation concerns the service contract practices of Transpacific Stabilization Agreement carriers, including allegations of discrimination against NVOCCs operating in this trade. The investigation follows a petition filed on May 10 by the NCBFAA & the Int'l Assn. of NVOCCs. The carriers involved -- APL, CMA CGM, COSCO, Evergreen, Hanjin, Hapag-Lloyd, Hyundai, "K" Line, Maersk Sealand, MOL, NYK, Orient OOCL Line, P&O Nedlloyd, Yang Ming, Hatsu Marine & Lloyd Triestino. Read the docket. 
  www.fmc.gov/Dockets/FF%2025%20TSA.sec15.Order.htm 
  
  
• South China Surge .......... as a continuing volume of cargo volumes through China's southern ports hit a stunning 52% growth for the 1st 8 months of 2002 over the same period last year while Hong Kong managed only a meager 2.3% growth. 
  
  
• NYK Ups U.S. Stake ........ as Nippon Yusen Kaisha, the Japanese shipping line, has takeover of Ceres Terminals Inc., the independent terminal operator active on the U.S. East Coast & Gulf coasts, the Great Lakes, Canada and the Netherlands. Terms were not disclosed. The takeover marks a big push by NYK into the common-user port business. The Japanese group already operates container terminals, mainly in Japan & on the U.S. West Coast. Ceres, headquartered in Weehawken, N.J., has annual revenues of more than US$150M. The container side of its operations handles more than 2.5 million TEUs a year. Founded in 1958 by Christos Kritikos, Ceres provides stevedoring & terminal operating services in: Halifax, Nova Scotia; Baltimore, Md.; Norfolk, Va.; Charleston, S.C.; Savannah, Ga.; New Orleans; Houston; Chicago; Cleveland; and Duluth, Minn. Ceres also participates in a joint venture with Logistec in Montreal. 
  
  
• Good-Bye Uniglory ........ as Evergreen Marine Corp. (Taiwan) Ltd. has absorbed the intra-Asian network of container services previously operated by Uniglory Marine Corp., marking the end of the Taiwanese intra-Asian shipping line. Both companies are affiliated with Taiwan shipping group Evergreen. Transfer of the intra-Asia & East Asia/Middle East services to Evergreen became effective Sept. 1. 
  
  
• Sea Van? .......... as Spanish shipbuilder IZAR & Rolls-Royce have plans for a new European High Speed Cargo Vessel as a cost-effective short-sea shipping alternative to road transport in Europe. The monohull EHSCV is powered by two Rolls-Royce MT30 gas turbines & Rolls-Royce Kamewa waterjets -- enables 124 trailers to be carried at a service speed of 37 knots & is economically competitive with road transport on routes above 300 nautical miles. IZAR said: "We believe there is a strong market for this ship, which offers a cost-effective solution to an urgent European transport issue." For photos & specs >> www.rolls-royce.com/latestn/images/thumbnails31.htm www.Rolls-Royce.com/latestn/images/thumbnails29.htm 
  
  
• Pulling Tickets .......... as the FMC has revoked 13 OTI licenses of companies that failed to maintain valid bonds. They are Cargo Inc. of Bensenville, Ill.; Dart Transit Co. in Eagan, Minn.; Gatell Int'l of Miami; General Shipping Co. of Bayonne, N.J.; Import Export Service of NJ in Newark, N.J.; L&E Int'l Services of Hialeah, Fla.; La FLor De Mayo Express in Bronx, N.Y.; Leyden Shipping Corp. of New York; Marist Int'l Group Inc. in Monrovia, Calif.; Northern Business Logistics Corp. in Berea, Ohio; RSB Logistic Services of Saskatoon, Canada; S.A.C. Int'l Forwarding in Miami; & Yowell Int'l AIrlines of Melbourne, Fla. 
  
  
• Jolt Bolt ........ as Savi Technology & OneSeal said they would jointly develop & market a low-cost electronic bolt seal that automatically transmits alerts over radio frequencies when lock mechanisms on cargo containers have been tampered. The new seal will combine capabilities from EchoPoint, Savi's latest active radio frequency identification technology, with OneSeal's design & manufacturing skills in producing high security locks. Savi said the new seal, which will be available in disposable or reusable models, will start at US$20 apiece. www.savi.com/news_events/2002releases/aprl03-02.html 
  
  
• M/V Palermo Senator Was Tiled, Not Nuked .......... as the 708-foot container ship ordered out of Port of Elizabeth, New Jersey on Sept. 11, after radioactivity was detected in a container was cleared to return to port Sept. 13. Inspectors determined there was no threat from the Liberian registered vessel. Coast Guard officers ordered vessel out to sea after radioactivity was detected among its 650 shipping containers. It remained in a security zone 6 miles off shore. The low-level radioactivity was determined to come from ceramic tile in cargo & harmless. 
  
  
• Maritime Law Squeezes The Juice ........ as O.J. Simpson pleaded innocent Sept. 26 (isn't he always) to a charge that he sped through no-wake zone near Miami's downtown in a power boat. Simpson's 30-foot boat ticketed July 4 by Marine Patrol officer for creating a wake in an area where speed limits reduced to protect endangered manatees. Also on board was Simpson's ex-girlfriend, Christie Prody. Simpson, 55, was acquitted of murder charges in 1994 slayings of his wife, Nicole Brown Simpson, & friend, Ronald Goldman. A civil jury later held the former football star liable for the killings & ordered him to pay the victims' survivors US$33.5M. 
  
  
• This Month In U.S. Navy History........ 1911 - Navigational instruments 1st requested for naval aircraft. 1951 - In Operation Summit, 1st combat helicopter landing in history, U.S. Marines landed in Korea. 1981 - USS Mount Hood (AE 29) helicopters rescue 18 crew members of Philippine Navy frigate, Datu Kalantiaw.

We're sorry, but there were so many sinkings, explosions, a major pirate attack, fires, cargo mishaps, & other disasters at sea that we do not have room to print even the highlights this month. About 1,000 people lost their lives at sea just this past weekend!!

But you can read all this month's disaster news at our special Internet web feature which provides full details of each event -- our Vessel Casualties & Pirate Activity Database. Bookmark the site and visit every day! Updated twice daily.
https://cargolaw.com/presentations_casualties.html

SPECIAL NOTE: Please view the dramatic new pictures at our special "Gallery of Cargo Loss" website feature.
https://cargolaw.com/gallery.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.