The Cargo Letter
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The Cargo Letter |
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Air & Ocean Logistics - Customs Broker News
30 April 2003
Part 1 of 1
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." Be sure to study our
Special Feature in "D" Section: FF in Cyberspace -- for the SARS
epidemic. A repeat of 1918? Not likely, but what will be the final
impact of SARS on world trade & transport? -- Here's what
happened in April 2003. To help you find what you need -- FAST --
there's now a transport search engine installed at our
www.CargoLaw.com website! 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 website. Our corporate sponsor -
Interpool,
Inc. -- named again to Forbes "Best
200 Small Companies" List -- for the 2nd consecutive year! Michael S. McDaniel, Editor, Countryman &
McDaniel, forwarder/broker attorneys at LAX. NOTE: The Cargo Letter is designed to be
read using a 12 point Geneva font on a standard 6 inch e-mail
filed. Our TECHNICOLOR edition requires AOL v3.0 or
better. INDEX to The
Cargo Letter: OUR "A" Section: Trade, Financial &
Inland News*** 1. Freight Forwarder Trade
Briefs ______________ 2. The Cargo Letter Financial Page
______________ OUR "B" Section: FF World Ocean
News*** 3. Freight Forwarder World Air Briefs
____________ OUR "C" Section: FF World Ocean
News*** 4. FF World Ocean Briefs
_____________________ 5. The Cargo Letter Cargo Damage Dispatches
_____ **Back By Popular Demand** OUR "D" Section: FF in
Cyberspace*** 6. The Cargo Letter "Cyber Ports of Call"
_________ OUR "E" Section: The Forwarder/Broker
World*** 7. New U.S. Transport Related Legal Cases
________ ======================================================= ************************************************* OUR "A" Section: Trade, Financial &
Inland News*** 1. Freight Forwarder Trade Briefs
_____________ U.S. Customs officials were scheduled to
begin implementing the Container Security Initiative (CSI) program
in Hong Kong in April, but delayed their trip as a result of the
severe acute respiratory syndrome (SARS) outbreak gripping the
territory. The outbreak of SARS has been blamed for
battering Hong Kong's tourism & catering industries, amongst
others, since the outbreak began, but the territory's ocean
logistics industry has hardly been affected, the head of the Hong
Kong Logistics Counsel (Logscouncil) said during the group's
meeting on April 24 -- but airfreight is another matter.
Cancellation of passenger flights in/out of
Hong Kong as a result of the SARS outbreak is greatly affecting
Hong Kong's air freight industry, according to the Hong Kong Assn.
of Freight Forwarding & Logistics Ltd (HAFFA). In recent days
37% of flights had been canceled & passenger throughput was
down by more than 60%. HAFFA, said: "Since over 50% of the export
cargoes are transported via the belly of passenger flights out of
Hong Kong, the cancellation of over 30% of all passenger flights
is affecting the normal operation of the industry. Freight
forwarders have to consider using other regional airports, in
particular on the intra-Asian routes." The problem is acute for
manufacturers throughout the Pearl River Delta region as the
cancellation of such a large number of flights is disrupting their
shipping schedules. HAFFA has appealed to both the government
& the airlines to work with Hong Kong's freight &
logistics industry to search for a solution to the
situation. The Hong Kong Air Cargo Terminal (HKACT)
starting 1 May 2003 will implement a 50% cut in office rents for a
period of 3 months due to the slowdown in traffic from the
outbreak of SARS. Trade growth in Hong Kong will be limited
to under 4% in 2003 due to the outbreak of SARS, the Hong Kong
Trade Development Council (HKTDC) said recently. A major slowdown
in the export sector, however, can be avoided if the disease is
contained in a few months, the government's chief economist
said. Taiwan said on April 27 it would bar
visitors from hot spots China, Hong Kong, Singapore & Canada,
as the island reported its 1st death from the disease. The next
phase of this has begun. In 1918 there was a similar virus outbreak.
Before the year was over, America would be ravaged by a flu
epidemic that killed 675,000 -- more than in all the wars of the
century combined -- before disappearing as mysteriously as it
began. The death toll was 70 million worldwide. Could 1918
influenza pandemic repeat itself? Not very likely. Even now the
World Health Organization (WHO) reports that new SARS cases in the
affected areas appear to be in decline, except China. Indeed, the
WHO has just removed the "Traveler Advisory" for Vietnam &
Toronto. SEE OUR SPECIAL "SARS" REPORTS IN "D"
Section: FF in Cyberspace, below. ***Hong Kong Exports Up Regardless
........ as since early April, cargo handled has decreased on a
weekly basis due to the current medical situation. However, total
tonnage throughput in the 1st quarter was 448,670 tons,
representing a 10.1% growth compared with the same period last
year. Exports to Asian countries recorded moderate growth of 2.6%,
with the Japanese market having declined by 3% for the quarter.
Europe contributed the lion's share at 25.5%, while the U.S.
showed an increase of 18.9% during the month period. Aggregate
export volume recorded in the 1st quarter was 232,309 tons, up 13%
compared with same period last year. ***Singapore Trade Keeps Pace
....... as total trade expanded 12.2% in March year-on-year to
US$22.6Bn, after a 14.6% growth the previous month. ***U.S. Trade Sluggish ....... as
the economy expanded at an annual rate of 1.6% in the 1st quarter
of 2003, the Commerce Dept. reported last week, which was
significantly weaker than analysts had predicted. Analysts were
expecting the economy to grow at an annual rate of 2.4% for the
quarter. The gross domestic product, which is the total value of
all the goods & services produced in the U.S., grew at 1.4%
pace in the 4th quarter of 2002. ***2001 - A Heavy Year ........ as
the U.S. Bureau of Transportation Statistics states that its new
publication, titled "U.S. Int'l Trade & Freight Transportation
Trends," shows that more than 10% of the 16 billion tons of
freight moved on the U.S. transportation system is Int'l freight.
The largest percentage of U.S. Int'l trade (78% by tonnage &
38% by value) moved in the maritime sector in 2001. ***Another 24 Hours? ....... as
Canada's Customs & Revenue Agency (CCRA) is to impose a
24-hour advance cargo notification scheme for marine cargo
importation starting next year. The 24-hour advance notification
represents the time frame by which ocean carriers & freight
forwarders will be required to submit data to customs
electronically before loading in foreign ports. Data will be
processed through automated targeting systems, & based on risk
assessment. The CCRA will also identify certain containers for
examination prior to loading. The 24-hour rule will be implemented
by April 2004 ***New 3PL Face? ........ as the 3rd
party logistics (3PL) industry is undergoing a huge transition.
Currently competing in a highly fragmented, high growth market,
3PL providers will soon be swept up in a massive wave of
consolidations. This trend will be driven by 3 factors: the
increased demand for lead logistics providers, the emergence of
new technology, and an increase in cash-rich buyers seeking
logistics targets. Shippers need to start scrutinizing their 3PLs
& decide how well these providers are positioned to survive in
the new era. Read the whole story in Supply
Chain Management Review. ***Bright 3PL Future ........... as
3rd party logistics providers (3PL) & Logistics Service
Providers (LSP), are seen by Thomas Craig, President of LTD
Management, to have great Int'l and/or domestic logistics
opportunities. The continuing growth of supply chain management,
outsourcing & globalization plus the dynamic effect of
E-Commerce are driving & will drive growth. Read the entire
story at Logistics
Focus. ***The Dangers of HHG ....... as
speakers at this month's American Moving & Storage
Association's annual conference at La Quinta, CA said that after
Sept. 11, 2001, household goods (HHG) were deemed high risk cargo
by the U.S. Customs Service. "If you X-ray a container of
pharmaceuticals or toys, it just looks like boxes that are all the
same," said Packimpex of Zurich, Switzerland. "But can you imagine
how afraid a customs agent is when he sees a household goods
shipment, which contains many different things including
electronic devices & bottles." But moving industry officials
said security has not had a big effect on domestic household goods
carriers. >> Speakers at the AMSA conference also mentioned
the rates the U.S. military pays movers are a source of strength
in an overall soft moving & storage market. ***Can't Pull The Wool Over U.S.
Eyes ....... as Applied DNA Sciences, Inc. a provider of
proprietary embedded-DNA security solutions, has announced that
the U.S. Dept. of Commerce has selected its proprietary
embedded-DNA textile marker system as one of 3 technologies as a
key solution that may allow for a cost-effective textile "marker"
system for practical use by both U.S. textile manufacturers &
the Customs Service. In Oct. 2002, as part of the Bush
Administration's long-term ongoing effort to address trade
challenges facing the U.S. textile industry, the Commerce Dept.
secured the expertise of the Oak Ridge National Laboratory to
evaluate & select the best process by which to identify &
verify whether the components of foreign-made goods were from the
U.S. or of foreign origin. U.S. apparel import preference programs
require the use of U.S. fabrics & yarns. The origin of fabrics
& yarns, however, is difficult to determine, compromising the
enforcement of these programs. The ability to identify U.S.
textile components with a practical & cost-effective "marker
system" would identify illegal textile imports, & authenticate
legal textile imports allowed under the apparel import preference
programs. The 3 marker system technologies are: (1) Applied DNA
Sciences' embedded-DNA; (2) ultraviolet fluorescent marks; &
(3) nanobarcodes. ***FedEx Freight ....... as along
with sister units FedEx Trade Networks & FedEx Ground, the
giant is now offering ocean & ground service from Asia to U.S.
locations via a new service called "FedEx Trade Networks
Ocean-Ground Distribution Service." The move follows services
previously offered by competitor, UPS Supply Chain Solutions, Inc.
(formerly Fritz). ***"Kirk To Enterprise ---"
......... as on April 15 UPS unveiled a new generation of the
wireless, handheld computer used by its drivers, ultimately
ensuring customers have the most up-to-the-minute tracking
information available. The 4th generation of the Delivery
Information Acquisition Device, or DIAD IV, incorporates new radio
communication links that allow it to communicate almost anywhere,
anytime; dramatically expanded memory, and a color screen that
allows alert messages to be color-coded for drivers. The
incorporation of 3 different types of radio communication links in
each unit will provide package delivery information almost
instantaneously. The color screen will make life easier for
drivers as well as customers signing for deliveries. Urgent
customer pick-up messages, for example, can be color-coded to
alert the driver. And the 128 megabytes of memory -- 20 times that
of the DIAD III -- positions UPS to provide future features, like
customer preference notes, to enable drivers to personalize
service even more. The DIAD IV, for example, features a new link
to Global Positioning Satellites that will allow drivers to easily
verify customer locations for pickup or delivery of packages,
particularly outside the U.S. UPS pioneered the use of handheld
computers in the shipping industry in 1991 when it introduced the
1st DIAD. The DIAD IV will be the 1st handheld computer to include
built-in wireless connectivity options for either personal, local
or wide-area networks. Each DIAD IV will feature a built-in Global
Packet Radio Service or Code Division Multiple Access radio
(depending on the area of the world in which it is operating); an
acoustical modem for dial-up access if necessary, & wireless
local area network connectivity (WiFi) to enable transmission
within a UPS center. The device also features a Bluetooth wireless
personal area network & an infrared port to communicate with
peripheral devices & customer personal computers. About 70,000
DIADs are used daily by UPS drivers throughout the world. Wow! Can
you hear me now? ***An L/C Alternative? --"UPS Exchange
Collect" ...... as a new UPS service is aimed at helping
companies accelerate payments & reduce the risks associated
with Int'l trade transactions. Under the new system, UPS collects
payment from the consignee while the shipment is still in transit.
Once delivery is confirmed, UPS deposits the payment in the
shipper's designated bank account. The whole process is done
online through e-mail & electronic remittance for fastest
possible turnaround. "On average, sellers receive payments via UPS
Exchange Collect in 10 days or less, said UPS. ***Sleep Walking .... as in the 1st
major change in hours-of-service rules in 64 years, the Federal
Motor Carrier Safety Administration (FMCSA) has increased the
number of off-duty hours for U.S. truckers from 8 to 10. However,
it increased the number of hours a driver may spend behind the
wheel from 10 to 11 hours -- and a work shift can be as long as 14
hours. The National Sleep Foundation (who knew?) objected to
provisions that allow drivers to be assigned nondriving duties,
such as loading & unloading trucks, after they have driven for
11 hours. The new rule does not mandate onboard monitoring
devices. The FMCSA said this could lower the cost of moving
freight by 1% & mean a yearly economic benefit of almost
US$100Bn in increased productivity. This rule governs drivers
transporting freight in interstate commerce in a property-carrying
commercial vehicle with a gross vehicle weight rating of at least
10,001 pounds, & operating vehicles transporting hazardous
materials in quantities requiring vehicle placards. Drivers of
buses involved in interstate transportation will continue to use
the current hours-of-service regulations. ***New Law Would Reflect A Best
Practice ......... as a bill introduced into the California
legislature this spring pits trucking concerns against shippers,
brokers, & steamship lines that arrange their own inland
movements of ocean containers. The Intermodal Reform Act (AB 1651)
would require any party that contracts for harbor drayage services
to verify that the motor carriers they hire comply with state
safety & licensing requirements. The bill also would shift
liability in the case of accidents or cargo losses involving
noncompliant motor carriers onto the contracting shipper, carrier,
or broker. ***Keep Your Eyes On The Road
....... as the defense spending act President Bush signed last
week directed that the US$20M in truck security grants Congress
gave to the Transportation Security Admin. in Feb. should be used
to fund the American Trucking Assn.'s "Highway Watch" program.
Despite Bush's signing of the bill, TSA spokesman Brian Turmail
said it was too early to say for sure if the money would go
directly to Highway Watch. ATA officials said they were hopeful
TSA would spend the money on Highway Watch & its affiliated
program, "America's Trucking Army." ***USF Red Star Inc.
Rocks...........as the USFreightways Corp. company, has
acquired Plymouth Rock Transportation Corp. & will began
service to all Plymouth Rock Transportation customers effective
April 21, 2003. Based in Stoneham, Mass., Plymouth Rock
Transportation provides overnight freight service to 11
Northeastern states from Maine to Virginia. USF Red Star provides
LTL (less-than-truckload) service throughout the U.S. &
Canada. ***E-Manifests At HKG .......... as
Tradelink Electronic Commerce Ltd, a joint venture between the
Hong Kong Government (SAR) & other private sector
shareholders, has begun accepting electronic cargo manifests from
companies in Hong Kong. The government, which owns slightly less
that 42% of the electronic commerce services provider, said air,
ocean, river & rail mode carriers can now submit cargo
manifests through Tradelink to the Hong Kong Customs & Excise
Dept., the Census & Statistics Dept. and the Trade &
Industry Dept. at one time. Carriers may also use the service to
receive detention notices &release vouchers issued by the
Customs & Excise Dept. submit import & export statements
for dutiable commodities, and reply to queries from the
government. ***Pakistan Rolls Forward ........
as the Int'l Chamber of Commerce in Pakistan (ICCP) has selected
Orderpro
Logistics, a U.S. based
transport & logistics software systems provider, to build
& manage a national logistics database service for Pakistan --
"Gold." The service will be free of charge to trucking companies
that provide discounted rates to Gold shippers. Shippers will pay
a 2% for the service, & receive discounted prices from Gold
trucking companies. The service will allow trucking companies
& shippers to provide their information through various forms
of communications including: fax, telephone, & via the
Internet. ***NAFTA Rail For NAFTA........ as
the Kansas City Southern Railway Company (KCSR), the Texas Mexican
Railway Company (Tex-Mex), & TFM, S.A., de C.V. (TFM) under
the common control of a single transportation holding company,
NAFTA Rail, to be headquartered in Kansas City, Missouri. As part
of the transaction, KCS will change its name to NAFTA Rail, which
will trade on the New York Stock Exchange. The common control of
The Kansas City Southern Railway Company & the Texas Mexican
Railway under NAFTA Rail would require approval of the U.S.
Surface Transportation Board. Additionally, the acquisition of
Grupo TFM shares by NAFTA Rail would require the approval of the
Competition Commission & the Foreign Investment Commission in
Mexico. ***Big Brown Boutiques Begin Branding
Blossom ......... as more than 3,000 Mail Boxes Etc. (MBE)
retail locations around the U.S. have begun re-branding to "The
UPS Store." The re-branding, scheduled for completion by Sept.,
will be the largest such effort in retail & franchise history.
It was launched in Seattle this month with the opening of the 1st
official location under The UPS Store name & look. UPS
acquired MBE in 2001. ***Short Circuited ....... as the
electric battery powered vehicle is dead. When General Motors
charged up its 1st electric-powered vehicle in the late 1980s, it
was heralded as the "car of the future." California officials saw
it as salvation & made the new technology the centerpiece of
their toughest-in-the-nation emissions rules. But now, more than a
decade later, the state is retreating from those strict pollution
policies, & dozens of GM's electric EV1s are lined up behind a
chain-link fence in Van Nuys. The Big Three automakers have all
abandoned their electric-battery vehicles & are focusing
instead on low-polluting hybrids & other technology. GM said
it is taking back the remaining 375 of its 1,000 pioneering EV1s
as their leases expire because it can't supply parts to repair
them. Some will end up in museums or research labs. Others will be
used for spare parts, batteries not included. ***"Take The High Road!" ..........
as John Sequeira, former Director of Risk Management at Fritz/UPS
& James Myers have formed "Take
The High Road" to change
corporate behavior & attitudes. The traing company is not
about compliance or corporate governance, but about having persons
do the right thing -- because it is the right thing. The company
says it conducts surverys & gives presentations and workshops
on improving ethics, honesty & integrity in the business
world. The speakers from Take The HIgh Road represent over 150
years of business experience. "It is a fact that companies
committed and programed to ethical and honest business practices
do better financially & have significantly greater
representation among the 100 top financial performers than
companies that do not emphasize ethics a key component of
management," the company said. ***Iraqi Treasure? ........ as
members of the news media & U.S. soldiers are being
investigated for shipping art, artifacts, weapons & cash from
Iraq, with criminal charges already brought in one case. At least
15 paintings, gold-plated firearms, ornamental knives, Iraqi
government bonds & other items have been seized at airports in
Washington, Boston & London, according to the bureaus of
Customs & Border Protection and of Immigration & Customs
Enforcement. None of the items displayed at a news conference were
priceless antiquities looted from Iraqi museums. Still, Customs
& military officials stressed there will be no tolerance for
American service personnel or civilians bringing Iraqi souvenirs
or war trophies back to the U.S. So far, only Benjamin James
Johnson, who worked as an engineer for Fox News Channel, has been
charged. But officials said more more seizures of stolen items are
expected in what is being dubbed "Operation Iraqi Heritage." The
Cargo Letter thinks there is a big difference between the
battlefield souvenirs that our fathers & grandfathers brought
home from the wars over the last 100 years -- and the wrongful
looting of museums. Let's hope our U.S. Justice Dept. can take a
breath, & see the difference. ======================================== 2. The Cargo Letter Financial Page
______ **Arkansas Best Corp. (parent of
national LTL carrier ABF Freight System)
DOWN with a 1st-quarter loss of
US$734,000, which included a US$9M refinancing charge. **Boeing Co. DOWN
with a net loss of US$478M for 1st quarter of 2003, 62% better
than same period in 2002, on revenues of US$12.3Bn, which was down
11% compared to Q1 in 2002. The Commercial Airplanes division's
deliveries of commercial airplanes decreased 35% to 71 airplanes,
& revenues fell 31% to US$5.7Bn when compared with 1st quarter
of 2002. **Cargolux Airlines Int'l.
UP
as operating profit increased by 150%
to US$55.7M in 2002, a record, generating an operating margin of
6.9%. Net profit increased by 220% to US$49.3M last year. Ton
kilometers flown in 2002 came to 4.157 billion, an increase of
10.3%. Cargolux has decided to cancel its war risk surcharge of
EURO.10 per kilo on all shipments, effective April 21. **C.H. Robinson. UP
as net income increased 28.8% to US$26.8M from US$20.8M in 2002.
**CMA CGM. UP
with net income in 2002 of EUR47 million (US$51.2M), a 68% rise
over 2001's EUR28 million. **CMB (Belgian maritime group).
UP
as it's estimated result for 1st quarter of 2003 will be EUR84
million (US$92M), compared to same period last year result of
EUR55 million. **CNF (parent of Menlo
Worldwide)
DOWN with net income of US$15.9M
for 1st quarter of 2003 -- down US$2.4M from 1st quarter
2002. **Continental Airlines.
DOWN
with a 1st quarter net loss of US$221M including a previously
announced after-tax special charge of US$41M, primarily related to
the reduced market value of its MD-80 fleet & spare parts
associated with grounded aircraft. Cargo revenue ton miles rose
7.5% in March to 86,205,000 from 80,216,000 during same month
2002. **CP Ships Ltd. DOWN
with a net loss of US$21M after exceptional charges for 1st
quarter ended on March 31 -- compares to an US$11M net loss during
same quarter in 2002. **Forward Air Corp.
UP
as net income increased 10% to US$5.4M compared with US$4.9M in
the prior-year quarter. Diluted earnings per share for 1st quarter
of 2003 increased 14% to $0.25 compared with $0.22 in the
prior-year quarter. **Int'l Shipholding Corp.
UP
with net income for 1st quarter 2003 of US$2.994M, compared to a
net loss of US$920,000 for same quarter 2002. **J. B. Hunt Transport Services, Inc.
UP with 1st quarter 2003 net earnings of US$11.2M, or diluted
earnings per share of 28 cents, compared with 2002 Q1 earnings of
US$4.9M, or 13 cents per diluted share on 8% higher average
diluted shares outstanding in the 2003 period. **Lufthansa Cargo.
UP
with a pretax profit of US$619.84M for the financial year ended
Dec. 31, 2002. **Old Dominion Freight Line, Inc.
UP
with record financial results for 1st quarter ending March 31,
2003. Revenue from operations increased 20.2% to US$152,865,000
from $127,147,000 in Q1 of 2002. Net income rose 89.4% to
US$4,247,000 from US$2,242,000 last year. **Roadway Corp. UP
with Q1 net income of US$8,010,000, or US$0.42 per share
(diluted), compared to net loss of US$1,749,000, or US$0.09 per
share (diluted), for the 1st quarter of 2002. **Samudera Shipping Line
(Singapore) UP
with a net profit of US$12.6M for 2002, up 79% from US$7M in same
period in 2001. **Sinotrans. UP
with a net profit of US$69.1M for the 12 months ended Dec. 31,
2002, up 26.5% from same period in 2001. **UPS. UP
with record-setting profits. For Q1 ended March 31, 2003, revenue
totaled US$8.02Bn, up 5.8% from the US$7.58Bn reported in 1st
quarter last year. Net income increased 24.4% cent to US$611M
compared to 2002's US$491M. Operating profit for the non-package
sector, which includes UPS Supply Chain Solutions (formerly
Fritz), nearly doubled to US$107M as revenues improved 11.4% to
US$693M. **UPS Supply Chain Solutions.
UP
as revenue was up 8.7% to US$500M for Q1. **USA Truck, Inc.
DOWN
as net earnings decreased to a net loss of US$1,148,303 for 1st
quarter of 2003, compared to net income of US$73,853 for same
quarter of 2002. **U.S. Xpress Enterprises, Inc.
UP
as operating revenues increased in Q1 to 11.9% to US$220.7M,
compared with US$197.2M for 1st quarter of 2002. Net income for
1st quarter was US$121,000, or US$0.01 per diluted share, compared
with a loss of US$1.4M, or US$0.10 per diluted share, in 1st
quarter of 2002.
***SAS Put Down ....... as the
Scandinavia airline group's credit rating has been downgraded one
level to Ba1 by Moody's Investor's Service. The downgrade was
based on a decline in demand for air travel because of weak
economic growth, the severe acute respiratory syndrome (SARS)
outbreak & uncertainty in Iraq, Moody's said. In related news,
SAS Group is to cut around 4,000 staff from its Scandinavian
Airlines (SA) unit as part of new cost cutting
measures. ============================================== ***************************************** OUR "B" Section: FF World Air
News*** 3. Freight Forwarder World Air
Briefs __________ ***Cargo In-Security ....... as
currently, less than 1% of shipped cargo is screened worldwide,
& even that little for only a few of the identified threats --
explosives, weapons, biological, chemical &
radiological/nuclear. Terrorism threats to disrupt western
economies, & regulatory changes driven by the U.S., specifying
requirements for cargo shipped into the U.S., are expected to
bring to dramatic changes in this industry. These findings in a
new report include the following: - The 10 companies currently active in the
field of cargo inspection will have to redesign their systems to
meet the post 9/11 threats of WMD. - Just the airline sector handles more than
60 billion tons of cargo per year, growing 9% per year. - Total cost of added security for airline
cargo alone is forecasted to surpass US$2Bn in 2006. - Present airline insurance costs are
US$6Bn per year, 6 times higher than their pre 9/11 levels.
A single cargo terror event will drive these costs even higher
(source: IATA) Read the entire Homeland
Security Research report. ***Singapore SARS Aid ........... as
starting next month it will give some relief to carriers &
tenants who use the city state's airports following a large
decline in business as a result of the severe acute respiratory
syndrome (SARS) outbreak. The measures include a 30% rebate on
aircraft landing fees for airlines using both Changi & Seletar
airports, and a 10% discount will be given to all tenants at
Changi Airport, the Civil Aviation Authority of Singapore (CAAS)
said. The measures begin on May 1 and runs through Dec. 31. CAAS
said its measures will amount to US$25.33M in savings to the
industry. ***Got SARS? ......... as Hong Kong
based Cathay Pacific Airways has suspended all passenger flights
to/from Malaysia following the Malaysian Government's decision to
impose stringent visa requirements on Hong Kong people wishing to
travel to the Southeast Asian country, but its 2 scheduled
freighter flights continue to operate. The Malaysian Government's
decision, which was made in light of the ongoing atypical
pneumonia crisis afflicting the world, has severely affected
demand for travel, the carrier said. Meanwhile, Continental
Airlines joins a number of carriers cutting their Asia routes. It
will temporarily suspend all its 5 weekly flights between its New
York hub, Newark Liberty Int'l Airport, & Hong Kong due to a
dramatic reduction in traffic on the route. ***Who Was That Masked BAX Global?
...... as it urgently air shipped an estimated 500,000 respirator
masks to Hong Kong to help fight against the outbreak of the SARS
virus. The shipment is one of the largest of its kind known to
officials at BAX and O'Mara Products Inc., the company that
quickly sourced large quantities of the surgical-style face masks,
known as N-95 respirators. "This has been an incredible feat,"
said Craig Sobczak, president of O'Mara Products, Grandville,
Michigan. "To come up with 500,000 masks immediately and get the
1st batch delivered within 48 hours was a monumental achievement,"
he said. "Finding the masks was one thing, but getting them to
Hong Kong as fast as we did is something else. BAX stepped up to
the plate & made this happen, it was phenomenal." ***Air America ....... as U.S.
commercial airlines have been awarded more than US$1Bn in military
contracts since Oct. 2002 as the war in Iraq increased demand for
transporting troops, supplies & humanitarian goods to the
region. Officials at the U.S. Air Force Air Mobility Command,
which oversees airlift services for the Dept. of Defense, said
that $1.06Bn was awarded to civilian airlines between Oct. 1 &
March 3. Last month, the agency estimated that charter airlift
expenditures for fiscal year 2003 would amount to about US$618M.
Although Air Mobility Command would not break out the value of
individual contracts, companies that routinely provide military
airlift services include American, United & cargo carriers
such as Atlas Air. More than 30 companies have contracts with the
military. In fiscal year 2002, when the U.S. liberated
Afghanistan, a total of US$1.38Bn was paid to commercial air
carriers. ***DHL Will Jump Up To 3rd Place?
....... as with the "duopoly" of UPS & FedEx firmly in its
sights, DHL has agreed to purchase most of Airborne Inc. The deal
will catapult the Int'l express company & its parent, Deutsche
Post World Net, into the No. 3 slot in the U.S. overnight air
market. DHL will pay US$1.05Bn in cash for Airborne, the
equivalent of US$21.25 per share. Under the proposed buyout, which
needs regulatory approval, DHL would buy Airborne's ground
delivery operations. Airborne's air operations will be renamed ABX
Air, and remain in the hands of its existing shareholders. U.S.
laws prohibit foreign control of domestic airlines. Currently,
foreign entities can own no more than 25% of a U.S. air carrier.
Legislation introduced by Sen. Ted Stevens, R-Alaska, to the U.S.
Senate appropriations bill would require air carriers to be
"effectively controlled" by U.S. interests. UPS & FedEx
contend the new legislation is needed because the DHL-Airborne
deal would skirt current laws. DHL could exert control over
Airborne through the service agreement, a UPS spokesman
said. ***The Maple Leaf Wilts ....... as
Air Canada has filed for protection from its creditors under
Canada's Companies' Creditors Arrangement Act (CCAA) -- and
concurrently a petition under section 304 of the U.S. Bankruptcy
Code. The company said it hopes this will allow it to restructure
its balance sheet & costs through savings obtained mainly from
aircraft lessors, lenders, bondholders & labor groups. In
conjunction with its filing, the company said it has arranged for
a US$700M, or an equivalent amount in Canadian dollars not to
exceed US$1.05Bn, debtor-in-possession (DIP) secured financing
facility from General Electric Capital Canada. ***Shipper's Aid ....... as
Lufthansa Cargo said it would reduce its fuel surcharge by 5
euros/cents per kilo to 10 euros/cents, effective May 6. It is the
2nd such reduction since April 7, when Lufthansa reduced the
surcharge from 20 euros/cents to 15 euros/cents per kilo.
Lufthansa said its decision was based on the continuing decline in
crude oil & kerosene prices. Nice trend. Cargolux &
Emerates Skycargo have followed the move down from EUR0.20
(US$0.22) to EUR0.15. Carriers implemented the surcharge in
accordance with fuel index procedures. The index explained, is
based on 5 key spot markets: Rotterdam, Singapore, New York, the
U.S. Gulf and the U.S. West Coast, adding these prices are
monitored against a fixed base of $0.535 per gallon equal to index
100. ***More Shipper's Aid ...... as
Martinair Cargo has joined the trend & axed its war surcharge
of EUR0.10 (US$0.11) per kilo of actual weight. The surcharge had
applied to the company's Middle East & Asia Pacific
routes. ***Singapore Airlines Takes Bows
....... as it was named OAG Airline of the Year 2003 at a
glittering ceremony at the Park Lane Hilton, London. The ceremony
marked the 21st anniversary of the OAG Awards. ***National Air Evaporates .........
as a federal court has approved the liquidation of bankrupt
National Airlines. The move, converting the case from Chapter 11
Bankruptcy to Chapter 7, means that defunct National Airlines can
sell its remaining assets to the highest bidder. Las Vegas-based
National ceased operations Nov. 6 after spending almost two of its
3 1/2 years in Chapter 11 bankruptcy protection. The sudden
grounding furloughed 1,500 employees & stranded passengers.
National operated 18 leased Boeing 757 jets, & billed itself
as Las Vegas' hometown airline. It became the 5th busiest at the
Las Vegas airport, flying about 260,000 passengers a month to Las
Vegas & 11 other cities. ***Concorde Flies Over The Horizon
........ as the world's only supersonic passenger jet & a
glamorous symbol of modern flight, will be definitively grounded
by Air France & British Airways later this year due to
flagging demand & rising costs. The decision to retire the
slender, needle-nosed jets after over a quarter century of flight
marks the end of an era in civil aviation. The product of a
supersonic adventure launched by French President Charles de
Gaulle & British Prime Minister Harold MacMillan in 1962, the
Concorde
evolved into a prestigious 100 seat tool of the rich & famous,
who paid lofty sums to hurtle across the Atlantic at twice the
speed of sound. Read the whole story: ***Emirates, A Major New Base
....... as the Dubai based carrier has been certified as a foreign
repair station by the U.S. Federal Aviation Administration.
Emirates is now authorized to carry out maintenance on U.S.
registered civilian aircraft at its Dubai engineering headquarters
as well as locations worldwide. The certification, under CFR Part
145 technical regulations, includes Boeing 737, 747, 757, 767, and
777 aircraft. Also covered are the Airbus A300, A310, A320, A330
and A340. Engines used by both types of aircraft that have now
been certified are the Pratt & Whitney's JT9 & 4000,
General Electric's CF6-50, CF6-80 & CFMI-56, and Rolls Royce
RB211 & Trent 700/800. That's a whole lot of parts. ***Just Wearing The Plane ...... as
a Southwest pilot & copilot -- both men -- were fired for
allegedly taking off all or most of their clothes in the cockpit
of their aircraft. They allegedly flew a B-737 without wearing
their uniforms, or much of anything else, for that matter.
According to the company, the incident happened months ago, but
that it released the pilot & copilot after an investigation.
One of the pilots reportedly claims he removed his uniform because
coffee was spilled on it, & that a flight attendant bringing
paper towels & soda water to the cockpit was a witness. Oh,
please towel me! Southwest won't elaborate, but a spokesman said
the matter is an internal one that is under appeal. However, some
passengers say they can't imagine any situation that would explain
the need to disrobe in flight (some passengers?). According to the
FAA there are no rules against flying naked, although pilots do
have to be dressed for all contingencies & emergencies when
flying below 10,000 feet. In a compromise, the pilots have
promised to remain in their underwear until the seat belt light is
turned off. This incident gives a whole new meaning for that other
word used to describe the "flight decK." ======================================================== ************************************************* OUR "C" Section: FF World Ocean
News*** 4. FF World Ocean
Briefs ***OOCL Won't Ship The Bug ........
as Hong Kong based shipping company Orient Overseas Container Line
(OOCL) is taking precautionary measures against the risk of Severe
acute respiratory syndrome (SARS) infection at its offices &
vessels. The company has implemented contingency plans to ensure
that services will not be interrupted in case of a SARS infection
at its offices or onboard its vessels. The company said in order
to reduce the risk of suspension of service due to atypical
pneumonia, in infected areas such as Hong Kong, it has assigned
employees of key functions to work in teams at different office
suites. In case of any crewmembers being infected by SARS, the
company said it will have a full team of standby crew to take
over, after immediate & thorough disinfection of the concerned
vessel. Also all crew members of OOCL from infected areas are
required to declare their health conditions before confirmation of
assignment & boarding the vessels. ***Feuling Down ,,,,,,,,,.. as
Matson Navigation Co., a subsidiary of Alexander & Baldwin of
Honolulu, will follow the trend & reduce its fuel surcharge by
1%, from 7.5% to 6.5%, in its Hawaii & Guam services from May
4. Well, it's a start. ***Back To Iraq ......... as with
post-war reconstruction clearly in its sights, U.S. freight
forwarder EGL (formerly Circle) has announced plans to launch
scheduled commercial-cargo sailings into the Iraqi port of Umm
Qasr. ***Plotting Against Singapore
........ as Malaysian & Dubai businessmen are planning to
build a new logistics hub in Malaysia in a move that could
challenge Singapore's position as the region's leading shipping
& logistics center. The Business Times said Dubai's economic
czar Mohamed Ali Alabbar & Malaysian port magnate Syed Mokhtar
Al-Bukhary have joined to establish an investment firm to invest
in ports, logistics & real estate projects in Malaysia &
the Middle East. One of their plans is to build a new logistics
base in Malaysia's southern state of Johor near Singapore. The
planned facility will be located next to Malaysia's Port of
Tanjung Pelepas, the start-up which has snared 2 of Singapore's
main shipping clients & is an emerging rival for the
city-state's preeminence as a regional transshipment hub. Malaysia
has been moving to strengthen Johor's capabilities as a logistics
hub to rival its smaller neighbor. Alabbar is described as the
leading economic adviser to Dubai's Crown Prince Sheikh Mohammad
Al Maktoum & says the joint venture intends to tap a massive
pool of money pulled out of the U.S. by Middle East investors
following the Sept. 11, 2001 terrorist attacks in New York &
Washington. ***What Over Capacity? ....... as
Korea's shipbuilding orders shot up by a whopping 339.7% on year
to 4.03 million CGT (compensated gross tons) for the 1st 3 months
of this year. The record order valued at US$5.36Bn suggests that
the volume of exports will taper off in the coming months
following the current peak. Japanese carrier "K" Line alone has
placed orders for 5 new container vessels, each with a capacity of
4,000 TEU, with Korean shipbuilder Hyundai Heavy Industries Co. --
all to be delivered between Dec. 2004 & Feb. 2005. ***Container Containment ........as
indicative of the nation's trade deficit, ocean cargo containers
are stacking up around the U.S. As one example, the
Newark-Elizabeth port complex unloaded more than 1.6 million full
containers in the 1st 11 months of 2002, but shipped out only
688,000, said the Port Authority of New York & New Jersey,
which runs the ports. Local cities are looking into limiting the
height of container stacks, as long as jobs at the port aren't
affected. Some observers say the containers stand in the way of
improving the area around the ports. This is a national problem
waiting for a smart answer. ***Who Goes There? ........ as
starting July 1, 2003, the Panama
Canal Authority will require
that any vessel over 300 gross tons must have an automatic
identification system (AIS) in order to transit the canal.
Portable AIS units will be available for lease from the Authority
at a cost of US$150 per transit. ***Chile Auction ....... as it will
in the 2nd half of 2003 hold an Int'l auction for operations of
its northern port of Arica, President Ricardo Lagos said during a
visit to the port. ***Do We Still Know How To Do This?
........ as the 1st commercial dry cargo vessel built in the U.S.
in 10 years embarked on her 1st working maiden voyage from the
Port of Tacoma on April 23. Totem
Ocean Trailer Express, Inc. is
introducing the 1st of 2 new Orca Class roll-on/roll-off trailer
vessels, the M/V Midnight Sun, into the Port of Tacoma to Port of
Anchorage, Alaska, trade route, scheduled to make her maiden
voyage ***Detroit De-Iced With A New Record
....... as April 15 marked more than U.S. tax day -- it was a 1st
in maritime history, as the Port of Detroit welcomed not 1, but 3,
oceangoing vessels to inaugurate opening the 2003 Int'l Great
Lakes Shipping Season. The M/V Lake Ontario, a Marshall
Islands-flagged vessel, was officially the 1st ship that arrived
at Detroit Marine Terminal, Inc. (DMT) at 6:30 a.m. At 7 a.m., M/V
Goviken, the Bahamian-flagged ship arrived. Its arrival was
followed by the Hong Kong-flagged vessel, M/V Federal Oshima,
which docked at Trenton at 8:30 a.m. ***"Pacific Shipper"Joins JOC
......... as the 77-year-old Int'l trade & maritime weekly
will become part of The Journal of Commerce Shipper Group. The
magazine group previously included, and will continue to include,
The Journal of Commerce, Shipping Digest, The Florida Shipper
& Gulf Shipper. The
Pacific Shipper is a magazine
which has something for everyone. A great publication. ***More Than Just Loose Change
........ as on March 21 at 6 a.m. RMS Queen Mary 2 entered open
water for the 1st time as she was floated out from her building
dock to a finishing basin at the Alstom Chantiers shipyard in
Saint Nazaire, France. That milestone signified the final stages
of construction. In days prior to its float out, Cunard observed
an age-old shipping tradition. When a sailing ship had its main
mast put into its mounting at the bottom of the ship, it was known
as the mast stepping. It was considered good luck to place coins
under the mast at the stepping. For QM2, two English pounds &
a 2 Euro coin were placed just behind the signal mast above the
Bridge. ***Shanghai's New Big Ditch .......
as it is to construct an inland water channel from 2005, which is
expected to help the city's inland container volume to reach 5
million TEU per year by 2010, according to China Communications
News. The 2,100 km long channel is forecast to help with the
navigation of bigger container vessels. The Shanghai Municipal
Government is expected to make an investment of
US$363.43M. ***Sick, Sicker, Sickest ....... as
group of North Korean sailors charged with helping to smuggle 110
pounds of heroin into Australia appeared in court this month &
were ordered to stand trial in a case that could highlight illicit
efforts by Kim Jong Il's regime to prop up the communist state's
moribund economy. One of the crew of the North Korean cargo M/V
Pong Su denied any involvement in the trafficking of the drugs,
with an estimated street value of US$48M. In small groups, 26 of
the crew were ushered into Sydney Central Local Court by police
wearing masks & latex gloves. Australian television later
reported 3 other crew had been struck down with tuberculosis,
while the Capt. had suffered a heart attack shortly after his
arrest. ***This Month in U.S. Navy
History *1778 - Capt. John Paul Jones of Ranger
leads a landing party raid on Whitehaven, England. *1912 - USS Chester (CL 1) & USS
Salem (CL 3) sailed from Massachusetts to assist RMS Titanic
survivors. *1918 - First Marine Aviation Force
formed at Marine Flying Field, Miami. *1941 - USS Niblack (DD 424), while
rescuing survivors of a torpedoed merchant ship, depth-charged a
German submarine; the 1st action of WW II between U.S. & German
navies. *1946 - USS Missouri (BB 63) arrives in
Turkey to return the body of Turkish ambassador to the U.S. & to
show U.S. support & willingness to defend Turkey. *1961 - Launching of 1st
nuclear-powered guided-missile cruiser, USS Bainbridge (CGN 25), at
Quincy, Mass. *1963 - During diving tests, USS
Thresher (SSN 593) lost with all hands (112 crew & 12 civilians)
east of Cape Cod, Mass. *1969 - A North Korean aircraft shoots
down a Navy EC-121 reconnaissance aircraft over the Sea of
Japan. *1987 - The U.S. Navy is ordered to
provide assistance to neutral vessels under Iranian attack outside
the exclusion zone & which requested help. =========================================== 5. The Cargo Letter Cargo Damage
Dispatches **Back By Popular Demand** We're sorry, but there were so many sinkings,
explosions, pirate attacks, fires, cargo mishaps, battles on the
water & other disasters at sea that we do not have room to print
even the highlights this month. Many people lost their lives at
sea this month!! 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. SPECIAL NOTE: Please view the dramatic
new pictures at our special "Gallery
of Cargo Loss" website
feature. SPECIAL NOTE: "FedEx
Vs. UPS "Road Challenge" at our
Internet "Singles Only" Feature. Don't miss this! 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. ==================================================== ********************************************** OUR "D" Section: FF in
Cyberspace*** 6. The Cargo Letter "Cyber Ports Of
Call" SPECIAL FEATURE >> Severe Acute
Respiratory Syndrome SARS
>>>>>>>>> do not be alarmed, but be
knowledgeable. A repeat of 1918? Influenza
Pandemic 1918 ........ the worst
epidemic America has ever known. Cathay
Pacific ........ new SARS
screening procedures. Centers
For Disease Control ..........
Interim Guidelines about Severe Acute Respiratory Syndrome (SARS) For
Cruise Ship Passengers & Crew Members Centers
For Disease Control ...... SARS, a
guide. U.S.
Customs ........ SARS, a
guide. World
Health Organization ....... SARS,
a guide. 1918
Influenza Pandemic - Chicago 1918
Pandemic ........ 70 million dead
from influenza MONTHLY FEATURES
>>>>>>>>> Here are our customary world
wide web sites of the month for your business, your information and
your amusement............. Best
Practices, LLC. ........ new study
focuses on over 100 successful companies & captures 20 metrics to
identify the best performers across the entire supply
chain. Business
Intelligence ......... analyzing
customer data. Bob
Hoe, Thanks For The Memories E-Nurturing
....... a supply chain marketing lesson learned from IBM Homeland
Security Analyst Issue 4
.......... latest issue of HSRC's newsletter examines areas of
concern in cargo security, "dirty bomb" security, homeland security
standards and the porting of "civilian" technologies & products
to homeland security. FREE. Iraq
Reconstruction Daily Fact Sheet MOL
......... new version of its global liner division web
site. Mediation
Search ......... 1st comprehensive
directory for experts in mediation, ADR & arbitration in the U.S.
& UK. There is also a witness
directory. Panama
Canal ......... March Summary of
Operations Transport
Canada ........ new "Small
Commercial Vessels" page. PRODUCTS>>>>>>>>> Cargo
Facts Air Cargo Newsletter .......
US$395 per year. Distribution,
Wholesaling & Logistics in China
.......report covers distribution, logistics & transportation in
China. The report begins with an overview of these industries &
an analysis of expected changes following China's entry into the
World Trade Organization (WTO). Globalink
........ independent forwarder network. Keller's
Security Resource Center Logistics
Management Magazine ......... to
subscribe FREE. Maritime
Reporter / Marine News ......
world's largest commercial maritime magazines can be delivered to
your mailbox each month for FREE. Navigation
Technologies ........ digital maps
for navigation and location-based services around the world.
Portals
Magazine ......... corporate
strategies for FREE. NOTE:
The Cargo
Letter does not receive payment for
these postings. EVENTS>>>>>>>>> 7
Ways To Improve YOUR Supply Chain
........Bentley College, Waltham, Massachusetts, Tuesday, June 10,
2003. American
Bar Assn. Section of Int'l Law &
Practice .......Spring Conference-
"Practicing Law - Inescapably Global." May 7-10, 2003- Mayflower
Hotel - Washington, DC Distribution/Computer
EXPO ....... May 21-22 &
Seminars May 20, Navy Pier, Chicago. European
Shipper's Council & Mare Forum
....... present the Shipper Forum 2003, on 12 June 2003 in ANTWERP,
Belgium Federal Maritime
Commission (FMC) ........10:00 A.M. -
May 6, 2003, 800 North Capitol Street, N.W., First Floor Hearing
Room, Washington, D.C. -- Fact Finding Investigation No. 25 -
Practices of Transpacific Stabilization Agreement Members Covering
the 2002-2003 Service Contract Season. (202) 523-5725 Global
Trade Review ......Managing
Emerging Markets Risk conference, University Club, New York, June
12th. Great
Freight Show: A Moving Experience
....... highly topical conference debating the real issues of
managing different modes of freight transport --10th & 11th June
2003) in Blackpool, UK. Harbor
Transportation Club Annual Golf Tournament
.........Fri., May 23, 2003, California Country Club, 1509 S. Workman
Mill Road, Whittier, CA 90601 Int'l
Chemical & Oil Pollution Conference & Exhibition
2003 ........ 27-29 Aug. 2003,
Shangri-La Hotel, Singapore Los Angeles
Transportation Club ........
presents May 6, 2003 Executive Series Speaker: Jane A. Beseda, VP
& General Manager, North American Parts Operations, Toyota Motor
Sales USA. Tues. May 6, 2003 11:30AM, Marriott Norwalk
Hotel, 13111 Sycamore Drive, Norwalk, CA Puget
Sound Passenger Vessel Seminar
......... U.S. Coast Guard, Seattle, June 17, 2003. Response to a
major marine casualty involving a medium to large passenger
vessels. Seatrade
London Int'l Maritime Convention
........16-18 Sept. 2003, ExCeL, London, UK Strategic
Counsel of Security Technology
........ Port Security Conference, Rotterdam, May 20 Webcast:
Forecasting From The Center of The Supply
Chain .......... May 8, 1pm ET,
from Microsoft. FOR
FUN>>>>>>>>> "Elmo"
The Iraqi Information Minister, aka "Baghdad Bob." Iraqi
"Most Wanted" Playing Cards
....... US$5.95. =========================================================== **************************************************** OUR "E" Section: The Forwarder/Broker
World*** 7. New U.S. Transport Related Legal
Cases _______ ***Another U.S. Supreme Court Query
...... as it has invited the U.S. Solicitor General to file a
brief expressing the views of the U.S. in the case of
Green Fire
Insurance Company v. M/V Hyundai
Liberty. In this case (decided
in 2002 by the 9th Circuit under the name of Kukje
Hwajae Insurance v. M/V Hyundai Liberty),
the 9th Circuit U.S Court of Appeals held, among other things,
that the forum selection clause in the ship owner's bill of lading
was controlling as regards an action brought against the ship for
damage to cargo carried on board. The Kukje Kukje Hwajae Insurance
case was won for our client in the federal trial court by
The
Law Offices of Countryman &
McDaniel. ***Dole
Food Co. v. Patrickson -&- Dead Sea Bromine Co. v.
Patrickson
(consolidated) U.S. Supreme Court --
April 22, 2003 Foreign Sovereign Immunities Act
(Removal of a Corporate Subsidiary) The U.S. Supreme Court held
7-2 (opinion by Kenney, concurrence in part & dissent in part
by Breyer & O'Connor) that a corporation is an instrumentality
of a foreign state under the Foreign Sovereign Immunities Act
(FSIA) only if the foreign state itself owns a majority of the
corporation's shares & status is to be determined at the time
a suit is filed. READ
THE DECISION 2nd Circuit U.S Court of
Appeals -- 2003 U.S.
Dist. Lexis 5007 Freight Forwarder as "Travel Agent"
-- Plaintiffs sued to recover for damage during transport of a
large, prototype envelope-printing press. A 7,000 pound machine
was damaged on its return home to Glen Head, New York from a trade
show in Europe. The importer had instructed Geologistics (acting
as "agent," not carrier) to "make sure that the trucking company
is prepared to not only unload [the] machine on our dock
but they must also be capable of moving it and placing it in our
building. We will require a trucking line that is capable of
'rigging' the unit in our building." Geologistics promised to use
"reasonable care in the selection of carriers," but the court
found that despite the fact that the trucker did not have a proper
permit to carry the load, the most for which Geologistics was
culpable for was ordinary negligence. However, the court found
that no amount of "fiery rhetoric" could change the reality of a
limitation of liability -- as contained in Geologistics invoice
"Terms
& Conditions of Service."
Damages were limited to US$50 under the National Customs Brokers
& Forwarders Assoc. of America (NCBFAA) standard
"Terms
& Conditions of Service."
The forwarder was just a "Travel Agent." 5th Circuit U.S. Court of Appeals
-- April 5,
2003 Bills of Lading: Court ruled that
when a charter party is clearly identified in a bill of lading, it
may be incorporated into the bill of lading. The time charter for
the vessel included a clause providing for arbitration of disputes
via a specific procedure. The time charterer then entered into a
voyage charter for carriage of steel coils from Latvia to New
Orleans. Bills of lading were then executed by the charterer &
the shipper for shipment of a cargo of steel coils. The bills of
lading stated that they incorporated all terms and conditions of
the time charter. The steel coils were delivered in a damaged
condition & the shipper sought local arbitration. The vessel
owner's objection was overruled by the trial court. On appeal, the
court held that the evidence showed that the intent of the parties
when the bills of lading were executed was to incorporate the
provisions of voyage charter into the bills of
lading.
Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping
News Lloyds & other world sources.***Global SARS Trade Warning
....... as trade in volume terms is forecast to increase by less
than 3% in 2003, the World Trade Organization predicted last week.
But the WTO warned the estimates were marked by downside risks due
to the continued sluggishness of the world economy & the
effects of the outbreak of severe acute respiratory syndrome
(SARS).
***Spain Says No To SARS
....... as it's customs authorities now require an official
certificate of disinfection for cargo coming from Hong Kong,
Singapore, Taiwan, mainland China & Toronto, Canada. Spanish
authorities said shipments arriving without official documentation
from the sanitation departments of SARS affected places will not
be allowed into the country & could be destroyed. The move
targets textiles, used garments, rags, scrap twine, cordage, &
rope named under customs tariffs 63.19 & 63.10. And as a
preventative measure, cargo will be fumigated on arrival at
Spanish ports -- likely not to include passengers.
**Alaska Air Group.
DOWN
with a 1st quarter net loss of US$56.3M, or US$2.12 per share,
compared with a net loss of US$85.1M, or US$3.21 per share, during
the corresponding quarter in 2002.
***Going Postal ......... as
the U.S. Postal Service has awarded contracts that will allow it
to begin shipping mail on airlines that offer the best service for
the lowest price starting June 28. Currently all 54 certified
airlines in the U.S. share in carrying the mail, with volume
divided evenly among carriers operating over the same route. The
post office paid the airlines about US$370M last year to carry the
mail. The new system is expected to improve service & cut
costs at the same time. Airlines entered bids to carry the mail
over various routes, & mail will be sent aboard planes of
those that offer the best price. If service slips on a route,
however, the mail will be switched to the carrier with the next
best price -- or so goes the theory. Contracts cover about 17
million pounds of mail a week, about the same amount the agency
ships by FedEx under a separate agreement.
***Going Both Ways ...........
as Japan Customs & Tariff Bureau officers are to be deployed
at the Los Angeles/Long Beach seaport as part of a Container
Security Initiative (CSI) pact signed between the 2 countries last
year. According to U.S. Customs & Border Protection (CBP),
Japanese customs officers will target sea containers destined for
Japan, & are to be responsible for screening any containers
identified as a potential terrorist risk. Last Sept., the CBP
& Japan's Customs service signed a CSI declaration of
principles. The port of Yokohama then became the 10th operational
CSI port in March, joining the already operational CSI ports of
Rotterdam, LeHavre, Bremerhaven, Hamburg, Antwerp, Singapore,
Vancouver, Montreal, & Halifax. Japan is the 2nd CSI partner
country to station customs personnel in U.S. ports as part of the
CSI program. Canadian Customs personnel are also currently
stationed at Newark & Seattle. As part of the two nations CSI
agreement, U.S. Customs & Border Protection has deployed a
team of CBP officers to the port of Yokohama, who are targeting
high-risk cargo containers destined for the U.S.
***U.S. Supreme Court
Invitation ...... as it has asked the U.S. Solicitor General
to file a brief expressing the views of the U.S. in the case of
James N. Kirby,
Pty Ltd. v. Norfolk Southern Railway
Co. In this case (decided in
2002 by the 11th Circuit), the appellate court held, among other
things, that where multiple bills of lading were involved, a
railroad was not the beneficiary of the COGSA limitation of
liability because the Himalaya Clause in the 1st bill of lading
was not sufficiently broad to encompass the railroad's shipment
under a subsequent bill of lading.
***ABN
AMRO v. Geologisitics
***Cargil
Ferrous Int'l Vs. M/V Sea Phoenix
The
Cargo Letter Correspondents:
Michael S. McDaniel
Esq, Editor (Countryman & McDaniel)
David Schuchman -- Interpool Corp. -- Webmaster of The
Cargo Letter Archive
Cameron W. Roberts, Esq. (Countryman & McDaniel)
The
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of Cargo Loss & Legal Lessons Learned
Library
& Search Engine of The Cargo Letter
TRANS-CAMS
Live Transport Cameras Worldwide
The
Cargo Letter
Home Page at IPX-Interpool
The
Cargo Letter -
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