Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
30 March 2005
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." Here is our industry review for March 2005. There will be no Cargo Law.Letter for May 2005, while we are on assignment in Eastern Europe & the Balkans.
We are often asked whether Countryman & McDaniel, conducts training seminars. Yes, from multiple Fortune 100 companies, to smaller forwarders, to the U.S. government, to insurance companies -- for years we have conducted inovative programs for domestic & Int'l claims, Customs, security, trade compliance & post 9/11 industry business practice. McD
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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 &endash;- Interpool, Inc. -- named again to Forbes "Best 200 Small Companies" List -- for the 2nd consecutive year! -- http://www.interpool.com/Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker/trade consultant attorneys at LAX.
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 Transport Related Legal Cases ___________
Back To Main Page
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs _____________
***EU Trade Barriers ....... as the World Trade Organization has agreed to rule on the legality of the European Union's customs regulations, which the United States says are a barrier to international trade, trade officials said. Speaking to a meeting of the WTO's Dispute Settlement Body, U.S. Ambassador Linnet Deily said Washington was concerned about inconsistent enforcement of customs law in the EU. She also criticized Brussels for failing to maintain a single body to review and correct administrative decisions. The WTO body agreed to set up a panel to rule on the dispute. Washington claims the EU is failing to respect global trade rules set by the WTO because it has a complex set of customs regulations that vary from country to country in the 25-nation bloc. The U.S. says this amounts to a trade barrier because it makes it harder for foreign companies to enter the European market.
***Malaysia Turns West ...... as there is a rising trend among Asian nations to establish bilateral free-trade agreements (FTA) with their biggest trading partners in a bid to strengthen economic ties & better position themselves against the phenomenal rise in China's economic power. The scramble to seal bilateral trade deals is perhaps most clearly demonstrated by Malaysia which has recently been placing considerable emphasis on attracting greater trade & investment from the U.S. A report in the Int'l Herald Tribune cited Malaysia's minister for trade & industry, Rafidah Aziz, saying just 3 years ago that her nation was opposed to western nations enjoying low-tariff trade agreements with members of the Assn. of Southeast Asian Nations (Asean). "We are not interested in having bilateral FTAs with anybody," she said then; now she is leading trade talks with the U.S. Former Malaysian Prime Minister Mahathir Mohamad echoed this stance. He was described as being a "staunch opponent" of bilateral free trade accords, having warned that nations engaged in such pacts risked giving countries like the U.S. a "backdoor into Asean". The about turn demonstrated by Malaysia, and other Asian nations such as Japan, is claimed to be more due to the rampant growth in China's export clout and its voracious appetite for raw materials to fuel its burgeoning economy, than frustrations over the pace of global free-trade talks under the World Trade Organisation's (WTO) auspices.
***China Surge On The High Line ....... as in the 1st 2 months of this year, China's exports surged 36.6% on-year to hit US$95.28Bn. However imports rose only 8.3% to reach US$84.18Bn, which was weaker than expected. This resulted in a trade surplus of US$11.11Bn, which compares to a deficit of US$8Bn in the same period last year. The strong export growth is in line with firmer global demand, said Goldman Sachs Asia economist Liang Hong, adding that textile exports are a major contributor.
***NAFTA Land Grows ....... as the U.S. Dept. of Transportation's (DOT) Bureau of Transportation Statistics (BTS) has issued a press release stating that more than US$633Bn worth of goods crossed the border by surface transportation between the U.S. & its North American Free Trade Agreement (NAFTA) partners Canada & Mexico in 2004. The 2004 total was 12.6% higher than the 2003 total, according to the BTS.
***More Pay For The Industry?...... as the average annual compensation for logistics professionals who participated in Logistics Management Magazine's 2004 Salary Survey was 6.6% higher than the previous year's average. That pay hike was just one of several indications that the job market for distribution professionals is brightening. Read the full story.
***Life In The Green Lane ..... as U.S. Customs & Border Protection intends to announce "at least the bulk" of its plan to create an inspection-free "green lane" for security-conscious importers this year, even if some programs underpinning the incentive are not ready, said Michael Mullen, the agency's director of trade relations. In January, Commissioner Robert C. Bonner declared his intention to provide immediate release of cargo to shippers in the Customs-Trade Partnership Against Terrorism who adopt higher security levels than new baseline standards set forth in the trusted shipper program. The highest tier of C-TPAT benefits would go to companies that ship their products through foreign ports with on-site U.S. customs officers targeting outbound cargo for exams under the Container Security Initiative, do not have a history of compliance problems, and attach a container security device to their box that can detect and record whether tampering has occurred with the door after the seal has been installed at the point of origin.
***More Costly Imports ........ as the U.S. Labor Dept. said March 19 that prices of goods imported into the U.S. rose 0.8% in Feb. following a revised 0.7% jump the month before. Economists forecast a 0.6% rise in the index, Bloomberg reported. Labor also said that excluding petroleum, prices rose 0.2%. The costs of all imported goods last month was 6.1% greater than in February 2004, Labor said.
***Appeal To Bad Boy Iran...... as the U.S. has announced that it would drop its longstanding opposition to Iran's membership in the WTO if Iran renounced its nuclear ambitions. In an 11 March statement, the Bush administration announced that the U.S. would join the EU in offering the Islamic Republic economic incentives including WTO membership if it agreed to permanently stop its production of enriched uranium, the fuel for nuclear power plants that could also be used to make nuclear weapons. The U.S. has been blocking Iran's requests for accession since 1996.
***The Fabric Factor ...... as the U.S. Commerce Dept. will launch a new system to monitor imports of textiles & apparel products. According to the Dept., the system will allow it and the public to have "timely access" to textile & apparel data from U.S. Customs & Border Protection (aggregated on a category basis). The Dept. of Commerce expects to have the new monitoring system in place by the 1st week in April. Data from the system will be posted biweekly on a Web site maintained by the department's Int'l Trade Administration Office of Textile & Apparel.
***Guatemala Checks The Map ......... as it has approved legislation to implement the U.S.-Dominican Republic Central America Free Trade Agreement (CAFTA). It is the third country after El Salvador and Honduras to do so. Guatemala also repealed a law that contravened a key obligation regarding the intellectual property of pharmaceuticals. This action paves the way for consideration (of CAFTA) in the U.S. Congress. The U.S. Congress could approve CAFTA by the beginning of summer. Guillermo Castillo, Guatemala's ambassador to the U.S., said that "speed-to-market is the major advantage our region has over the Orient."
***2nd Chance Apple In Garden of Eden ........ as forwarder Raphael Katz ltd. handled 1st ever apple trade from Israel to Syria, Mar 14, 2005. Six trucks carrying 200 tons of Golden Delicious apples grown by farmers in the Israeli-Golan Heights passed through Quenitra border crossing point -- the 1st commercial traffic between the countries in more than 30 years.
***Magnesium Dump ...... as the U.S. Int'l Trade Commission has ruled in favor of imposing antidumping duties on magnesium imports from China & Russia. Dumping is defined as import of goods at price below the domestic market or a 3rd-country price or below the cost of production. A dumping margin represents how much the fair value price exceeds the dumped price. The U.S. Commerce Dept. made its final affirmative determination in Feb., calculating dumping margins ranging from 91.3% to 141.5% for China and from 18.7% to 22.3% for Russia. According the Commerce Dept, U.S. magnesium metal imports from China increased from US$18.2M in 2002 to US$20.9M in 2003 and from Russia from US$29.5M to US$37.4M over the same period.
***Dragons Trade .... as trade between China & Singapore is expected to breach the US$30Bn mark this year, Xinhua reported, quoting Chinese Embassy officials in the Lion City. Statistics from mainland customs authorities show that the value of trade between the countries totalled US$26.68Bnin 2004, a growth of 37.9% year-on-year. Chinese exports to Singapore rose 43.1% to US$12.69Bn, while imports from Singapore increased 33.5%to US$13.99Bn.
***Will Martha Stewart Rule? ....... as K-Mart completed its purchase of Sears, Roebuck and Co. for US$12.3B on March 24 -- company said there would not be widespread store closings, news services reported. Kmart & Sears each generate large volumes of freight and at one time maintained sizeable private fleets. Officials said although some layoffs would be announced by the end of April, vast majority of the work force of 400,000 will keep their jobs. Did you know?
***Beef On The Nile ....... as Egypt will resume the importation of U.S. beef from cattle less than 30 months of age, starting immediately. Egypt closed its borders to U.S. beef after the U.S. Dept. of Agriculture reported a case of bovine spongiform encephalopathy, or "mad cow" disease, in Dec. 2003.
***Another Station To Walk Around ....... as the U.S. government officially reopened the border station at Tecate, Mexico, near San Diego March 11 after completing the 1st phase of a 3-year, US$18.8M remodeling project to expand & modernize the 73-year-old facility. The new Customs & Border Protection compound will have 5 times as much space as before and high-tech security tools such as license plate readers, drive-through radiation detectors & gamma ray scanning machines for processing vehicles, passengers and cargo. The rebuilt port began processing commercial trucks March 11. Passenger vehicles, pedestrians & empty commercial trucks began using the facility in Feb.
***HAZ MAT For All ....... as the U.S. Departments of Justice, Homeland Security & Transportation, along with 3 key congressional leaders, have weighed in on the side of CSX Transportation and the railroad industry in opposition to the District of Columbia's ban on the transportation of hazardous materials. The federal agencies and congressional leaders say the ban makes it more dangerous to transport hazardous materials because it increases the time and distance the materials must travel. They made the case in separate filings in federal court and before the Surface Transportation Board, where CSXT is challenging the District ordinance.
***U.S. Railroads Buff Up ...... as they saw a strong gain during the week which ended Feb. 19 compared with the corresponding week a year ago, the Assn. of American Railroads (AAR) reported. Intermodal volume for the week totalled 222,937 trailers & containers, up 22.8% from a year ago, with container growth of 29.5% & trailers gaining 6.1% Carload freight amounted to 350,225 units during the week, up 4.9% from a year ago with loadings up 5.8% in the west & 3.7% in the east.
***Green Loco ........ as Union Pacific Corp. has put into service the nation's 1st locomotives using hybrid technology at the ports of Los Angeles & Long Beach. The locomotive cost about US$800,000 & is a switch engine that moves cars at slow speeds to hook them up to trains pulled by larger, conventional locomotives. A hybrid engine capable of hauling freight cross-country might be in use within 3 years, Union Pacific officials said. Data has shown the hybrid emits 80% to 90% less nitrous oxide than conventional equipment & uses 40% to 70% less diesel fuel. The engine runs on electricity until its onboard battery bank, which occupies most of the locomotive, runs low. A 290-horsepower diesel engine then kicks in to recharge the batteries. Ain't no Honda.
***Brown Is Green ....... as UPS is implementing two new initiatives to protect the environment - 11,000 computers soon will automatically go to "sleep" when not in use, and 14 California facilities have begun purchasing "green" power. Indeed, UPS has joined the U.S. Environmental Protection Agency's Green Power Partnership thonth. The computer initiative is part of what's known as the "ENERGY STAR Million Monitor Drive." UPS is installing "sleep" software on 11,000 of its computers in Atlanta, Louisville, Towson, Md., & Mahwah, N.J., to conserve energy while saving UPS US$145,000 per year. More, UPS now has 14 facilities in California currently using "green" power as part of their electricity supply. This power is supplied by 3 Phases Energy Services and comes from biomass sources. Biomass refers to a waste-to-energy process and can take the form of converting landfill gas, human & animal waste or agricultural waste to energy.
***FOR SALE: India ...... as the government has started a move to sell off 15% of its 80.1% stake in the Shipping Corp. of India (SCI) as part of its divestment strategy for the 2005-2006 fiscal year
***Fret Takes ....... as the European Union regulators has approved a US$1.98Bn state-sponsored bailout of Fret SNCF, the money-losing freight division of France's state-owned rail company. To gain EU approval, France agreed to open its rail market to more competition before the end of 2006. Under the plan, Fret SNCF will receive a capital injection of US$925M from SNCF, financed by divestment of assets. It will also get French state subsidies worth up to US$1.06Bn. Fret will spend the money modernizing rolling stock and overhauling its financial structure.
***UPS Gives ...... as for the 5th year in a row, UPS is the largest donor to United Way and has set a new national record by contributing more than US$57.3M. This year's support surpasses the previous record donation set in 2004 by UPS of US$54.2M. In fact, UPS was the 1st company to exceed the US$50M mark in one annual campaign when it donated US$52.2M in 2002.
***Target Logistics Scores ...... as it has acquired the stock of Air Cargo Int'l & Domestic, Inc. (ACI), a privately held 3rd party logistics provider of freight forwarding services based in New Jersey, for cash and an earnout based on gross profit over 5 years. The Company plans to merge the operations of ACI into its wholly owned subsidiary, Target Logistic Services, Inc. For the 12 months ended Dec.31, 2004, Air Cargo reported approximately US$16M in revenue. For the same period, Target reported approximately US$135M in revenue.
***Hub Has New Spoke ..... as the Downers Grove, Ill-based freight transportation management company Hub Group Inc. has changed the name of its logistics unit from Hub Logistics to Unyson Logistics.
***Way Down South In Dixie Box ....... as Continental Holdings, a Richmond, Va.-based real estate & investment company, has acquired Int'l & domestic packaging services provider Dixie Box & Crating. Dixie provides export, domestic & military packaging services, including on-site packaging & plant dismantling, certified hazardous materials packaging for ocean & air shipments, heavy lift & specialized trucking, warehousing & export container loading. Dixie operates 10 warehouses located in Austin, Texas; Charleston, S.C.; Fort Lauderdale, Fla.; Houston, TX; Norfolk, Va.; New Orleans, LA; Rancho Dominguez & North Hollywood, Calif.; Phoenix, Ariz.; & Savannah, Ga.
***E-Slam On Theft ....... as electronic devices aimed at preventing a Class 8 truck from being hijacked were unveiled by Int'l Truck & Engine Corp. on March 16. The new technology, which uses a special ignition code, would shut off the truck if a hijacker got the keys but did not use the code. The device is part of a security package Int'l officials said they would install on its new heavy-duty trucks beginning in April. What will the crooks come up with next? ..... and they will.
***Power2Ship Moves ...... as the Web-based logistics company has acquired a non-asset based trucking company, Commodity Express Transportation (CXT). Based in West Columbia, South Carolina, CXT's successful freight transportation services for customers throughout the Southeastern U.S. since 1982 realized revenues of US$16.5M in 2004. This acquisition establishes a new home for Power2Ship's owner-operators while integrating a 137,000 sq. ft. distribution facility in Blythewood, South Carolina. Also acquired, New Jersey-based GFC, Inc., a non-asset based intermodal drayage company with revenues of approximately US$5.7M in 2004 -- now to be known.as Power2Ship Intermodal.
***Phoenix Rises ...... as U.S. Customs & Border Protection has verified Phoenix Int'l Freight Services, Ltd. is validated in the C-TPAT program. There are more than 8000 companies enrolled in C-TPAT yet only several hundred have been validated so far. Phoenix was selected as a priority for validation due to the high volume of international traffic it handles. Phoenix Int'l Freight Services, Ltd. is the largest privately owned full service Int'l forwarder/NVOCC & Customs broker headquartered in North America.
***Schneider Logistics In The Baltic ........ as it is opening a new office in Olomouc, Czech Republic, as it further develops its European business. The office is the new Shared Service Center for European logistics services. A key service that Schneider Logistics will also offer through Olomouc is freight audit & payment.
***Meridian IQ Gets Its Bearing ........ as the logistics & supply chain management unit of Yellow Roadway Corp. acquired GPS Logistics Group, based in Shanghai, China. No terms of the deal released. The company said in a statement it has worked with GPS Logistics for more than 3 years. In 2003, Meridian had acquired the GPS Logistics' U.S. operations, and in 2004 acquired its U.K. operations. With the deal, Meridian IQ will gain 230 employees in 25 offices throughout Asia.
***Schenker Korea..... as the integrated logistics services company is establishing its own logistics center in a free trade zone near South Korea's Incheon Int'l airport. The new, 10,000-square-meter facility, located in the greater Seoul area, will start operating in 1st quarter of 2006, providing direct access to 50% of Korean market.
***Rock-It Cargo - Grooves ......as it was awarded its 3rd straight "Pollstar Transportation Company of the Year Award." The 16th Annual Pollstar Concert Industry Awards honored the best in the business in various categories including "Major Tour of the Year" which was presented to Prince, who was on hand to accept his award. Pollstar is a concert industry magazine that for 20 years has provided music business professionals with the most reliable & accurate information about touring schedules, ticket sales, & trade news.
***Wal-Mart's Big Broadcast ...... as it will roll out its RFID program to 600 stores & 12 distribution centers by Dec. 2005. The RFID program requires suppliers to mark their pallets & cases with radio frequency identification (RFIDS) tags. The program will grow from 100 to 200 suppliers by year's end. The giant retailer had received 23,753 tagged pallets at its 3 Texas distribution centers, which are pioneering its deployment of RFID.
***Fallen ..... as a former customs inspector was sentenced this month to 7 1/2 years in prison for taking bribes to smuggle Indian nationals into the U.S. Otis L. Rackley, 41, could have gotten less than 5 years, but he failed to appear to answer questions from the U.S. Probation Dept. for a pre-sentence report, Judge Dennis M. Cavanaugh noted. Rackley, an inspector with the U.S. Customs & Border Protection, pleaded guilty in June, admitting he provided illegal immigrants with documents & passport stamps. Investigators believe he received about US$1M bribes from 2000 until his arrest in Dec. 2003 for getting about 100 illegal immigrants into the country, the U.S. Attorney said.
***Qualcomm's Secret Weapon ...... as the untethered trailer tracking system takes to the field. Qualcomm's T2 TrailerTRACS system uses global positioning system & cellular technology to track trailers. Untethered devices attach to a cargo trailer & send signals to a monitoring location without routing signals through the truck's cab.
***Scales of Justice ...... as the District of Columbia announced plans to install electronic truck-weight sensors on Interstate 295 as part of an effort to catch overweight container & trucks coming into the city of Washington, D.C.
***Before They Get The Keys ........ as truck drivers who haul cargo labeled as flammable, combustible, radioactive or poisonous are now going to be scrutinized as closely as the hazardous materials that fill their tankers & trailers. In the coming months, roughly 3 million drivers across the nation will begin to be fingerprinted & put through FBI criminal background checks. Their names also are cross-referenced with federal databases related to terrorist activity, a practice the U.S. Transportation Security Administration began last year. The truckers - authorized to carry materials such as gasoline, propane, chlorine & dynamite - will have to pay US$94 for the fingerprinting. Some of their companies will pick up the bill. The federal Transportation Security Administration & the FBI will conduct the "security threat assessments" as drivers renew their credentials allowing them to haul hazardous materials. Drivers who haul hazardous materials must attach a placard to the back of their tankers or trucks.
***A More Real You ...... as later this year the U.S. State Dept. will start issuing biometric passports with a face-recognition feature & a digital signature embedded in a tiny chip. The high-tech IDs will be issued only to new applicants & those seeking to renew expiring passports. Expect a US$12 surcharge, in addition to US$55 for renewals & US$85 for new applications. Apart from security advantages, the passports may help lines move faster by eliminating confusion when a traveler's face doesn't look quite like his or her picture. Australia, Ireland and the Netherlands will also introduce biometric passports this year. The chip sends data over radio waves. To address privacy concerns, the State Dept. is working on a broadcast shield made of metal fibers woven into the passport.
***What's Shak'n In East Germany ........as a parcel which vibrated and made strange noises caused panic in a post office in Chemnitz, eastern Germany before it was revealed that it was an inflatable erotic doll, police said. "The post office worker thought it could have been a dangerous object, even a bomb," a spokesman for Chemnitz police said. The police were called & noticed that the sender's address was on the package. When they confronted the red-faced sender of the parcel, he explained it was a lifesize doll which he had folded up to send back to the manufacturers because it had failed to have the desired effect. "He opened the package and expertly removed the batteries," said the spokesman. "It was rather embarrassing for the sender." East German postal officials requested one week each to examine the evidence before trial.
***Transportation Always Has The Answer ........ as scientists at MIT's Media Lab in the U.S. have invented an alarm clock called "Clocky" to make even the doziest sleepers, who repeatedly hit the snooze button, leap out of bed. After the snooze button is pressed, the clock, which is equipped with a set of wheels, rolls off the table to another part of the room. "When the alarm sounds again, simply finding Clocky ought to be strenuous enough to prevent even the doziest owner from going back to sleep," New Scientist magazine said. Transporting wake-up time!
2. The Cargo Letter Financial Page _____
**Cathay Pacific Airways. UP with a 235% jump in net profit to US$579M in 2004. Cathay's revenue from cargo services increased 15% to a record US$1.5Bn.
**Deutsche Post AG. UP with net 2004 profit of $2.09, up 7.9%.
**China Shipping Container Lines. UP as net profits for 2004 jumped 188% to $487M.
**DHL (business unit of Deutsche Post AG in the U.S.) DOWN with an operating loss of US$653.7M in 2004.
**EGL Inc., UP as its net income more than doubled to US$50.9M in 2004 from US$23.9M in 2003.
**FedEx. UP with Q3 net profit of US$317M, up 53% from the US$207M it earned in same quarter in 2004.
**Hapag-Lloyd. UP as combined profit increased 7% to US$358M in 2004, despite the depreciation of the dollar and higher fuel prices that ate into the earnings
of Hapag-Lloyd Container Line.
**Kitty Hawk. UP with a net profit of US$6.5M for 2004, which was up compared to its US$2.6M net profit in 2003.
**Korean Air. UP with a net profit of US$470.16M in 2004.
**LAN. UP with record net income of US$163.6M for full year 2004, nearly doubling 2003's net income of US$83.6.
**P&O Nedlloyd. UP with an operating profit from container shipping of US$388M in 2004, 4 times the US$96M operating income earned in the previous year.
**Seaboard Marine. UP as operating income rose 11-fold to US$61.6M in 2004 from US$5.8M in 2003, on higher freight rates & container volumes.
**Thai Airways Int'l. UP with Q1net profit of US$147.95M, an increase of 34.52% compared to same period last year.
**UAL Corp. (parent of United Airlines) DOWN with operating loss of US$179M for Feb.
***Interpool Corp. Up.... as there will be a cash dividend of $.0625 cents per share for the 1st quarter of 2005. The dividend will be payable on April 15, 2005 to shareholders of record on April 1, 2005. The aggregate amount of the dividend is expected to be approximately US$1,800,000. Interpool is one of the world's leading suppliers of equipment & services to the transportation industry. It is the world's largest lessor of intermodal container chassis & a world-leading lessor of cargo containers used in In'l trade. Interpool Corp. is sponsor of The Cargo Letter Archive.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs _____
***Protecting Their Air ....... as the U.S. threatened to break off negotiations & seek a ruling from the World Trade Organization unless the European Union sticks to negotiating terms for ending subsidies for large aircraft manufacturers Airbus & Boeing. In mid-January, the sides agreed to settle their dispute over state subsidies for aircraft makers through direct negotiations rather than pursue litigation through the WTO. Both sides pulled their requests for WTO arbitration in Dec. The Office of the U.S. Trade Representative issued a statement March 18 criticizing the EU for "backtracking & seeking to change the terms" of the negotiating framework for ending subsidies. The dispute escalated last year after the U.S. terminated a decade-old agreement permitting limited subsidies to commercial aircraft producers expired. The U.S. argued that the EU was not phasing out state aid as the agreement required. The U.S. filed a complaint against the EU over state aid to Airbus and the EU retaliated with an action for U.S. support of Boeing. Airbus is preparing to launch the A380 super jumbo jet & Boeing argues that Airbus is now an established company that no longer requires state aid for research, development & marketing.
***Unarmed Hope .......as while the pace of training & deployment of armed pilots on commercial flights has picked up, supporters of the program say the Bush administration still is making it unnecessarily difficult for crews to take guns into the cockpit. Pilots who monitor the program estimate that between 4,000 & 4,500 have been trained and deputized to carry guns since the Federal Flight Deck Officer program began in April 2003. That total is about 3 times as many as a year ago, yet a fraction of the 95,000 pilots who fly for U.S. airlines. The exact number of armed pilots is classified. No pilot has fired a weapon, either intentionally or accidentally, while on duty, according to TSA . The Coalition of Airline Pilots Associations, gave the TSA a 'D' for the guns-in-the-cockpit program as part of its annual "Aviation Security Report Card." Is 5% a serious effort? Ask those who fly -- and our cargo.
***Mega Dubai ........ as the Dubai government says the Middle Eastern city is setting up the world's 1st integrated logistics and multi-modal transport area which will include the new Dubai Logistics City (DLC), Jebel Ali Port and Free Zone & the new Jebel Ali Int'l Airport (JXB), according to a DLC statement. DLC & JXB will be part of the 1st phase of the new Jebel Ali Airport City, which eventually will span almost 140 sq. kilometers, featuring logistics, aviation, commercial, residential, educational, recreational, technology and entertainment facilities. "This is the world's 1st truly multi-modal facility for air, sea & road services combined into an integrated common logistics platform. All transport modes, logistics and value-added services, including assembly and value-added manufacturing will be located in a single customs bonded and free zone environment. "Dubai Logistics City will allow companies to integrate their regional manufacturing, sales & support infrastructure and organization into their global networks," said the Dubai government. Spread over 25 sq. kilometers, DLC will begin operating in 2007.
***Tianjin Binhai Int'l Airport Updates ...... as TBIA is to spend US$224.73M to improve & enlarge the facility as authorities there aim to handle a cargo volume of 250,000 tons & a passenger throughput of nine million passengers annually by 2015. A major China push.
***Ontario Int'l Airport Well Deserved ....... as ONT won the "Air Cargo Excellence (ACE)" award for medium-size airports in Air Cargo World's survey of airports nationwide. Air Cargo World is a leading publication in the air cargo industry and presented its 1st-ever ACE awards this year.
***Continental Yankee To China ........ as the U.S. Dept. of Transportation last week made final its Feb. proposal allowing Continental Airlines to enter the U.S./China air market with 7 weekly passenger& cargo flights between Newark, N.J. and Beijing beginning March 25. The flights are expected to be popular with forwarders.
***After 400 Years, Germany Gets Switzerland ...... as German airline Lufthansa is set to acquire Swiss Int'l Airlines after the boards of both airlines, the Swiss government & a large block of Swiss shareholders approved the takeover of the struggling airline March 21. The deal is potentially worth US$406M. Swiss will continue to operate as a separate airline with a significant amount of autonomy.
***Alitalia Joins The Sky ....... as it has signed up to join SkyTeam's U.S. Cargo Joint Venture (US/JV), an Atlanta-based company that deals with products & services on behalf of Air France, Korean Air & Delta. Alitalia is in the process of boosting its capacity in the U.S. market with five MD11 Combi aircraft, which are now being converted into all-cargo version & will soon join the fleet.
***Just Say "LAN South America" ......... as Chilean LAN Airlines said that it has initiated negotiations to acquire Argentina state-owned LAFSA airline. LAN said it will rebrand the airline to LAN Argentina and will operate domestic & Int'l passenger, mail and cargo services. LAN said it will propose to the government the incorporation of all of the LAFSA employees. The LAN Alliance includes LanChile, LanPeru & LanEcuador, and operates 54 passenger aircraft and 7 dedicated freighters.
***A Long Way From Flight 007 ....... as KoreanAir has entered into a codeshare agreement with Russia's Aeroflot under which both carriers will share the same code on flights between Incheon & Moscow started March 27. Aeroflot is the 14th carrier to establish a codeshare agreement with Korean Air.
***00-777 -- Licence To Sell ....... as Air France said March 25 it plans to replace part of its aging fleet of cargo planes with Boeing Co.'s new 777 freighter, but the airline would not say whether it will become the launch customer for the proposed new airplane. There is a report in financial daily La Tribune that Air France is about to become Boeing's launch customer by ordering 7 of the 777 freighters. The 777 freighter would be based on passenger version of the long-range 777-200LR, which is scheduled to enter service in early 2006. The freighter would be able to carry 222,000 pounds of cargo up to 6,400 miles. Rival Airbus SAS has said its new superjumbo A380 freighter will be able to carry 341,000 pounds of cargo the same distance. It's also scheduled to enter service in 2008. A key advantage of the 777 freighter for commercial airlines such as Air France is that it has just 2 engines, compared with 4 engines for the A380 & the 747 freighters. That could be a big cost savings for an airline that doesn't need as much space as bigger planes offer.
***Requested Rudder Review Renewed ........ as world's largest aircraft manufacturer, Airbus, has alerted airlines worldwide to check the rudders of their fleets of A310 and A300-600 aircraft, after a section of a tail part fell off an Air Transat A310 plane in early March, Bloomberg News reported. According to the article, Airbus has recommended airlines to carry out visual inspections & what's known as "tap audio analysis" on the rudders which are made of carbon fibre, adding that 400 planes were involved worldwide. Aviation investigators in Canada are reportedly still examining the Air Transat incident & have not yet determined why most of the rudder came off. The Air Transat flight with 261 passengers & 9 crew was forced to return to Cuba half an hour after taking off for Quebec City in Canada when most of the rudder fell off at cruising altitude.
***Out of Hybernation ....... as the1st newbuild IL-76 cargo aircraft which is capable of carrying payloads of up to 50 tons of cargo is scheduled to begin flight testing in June before entering services with the Volga-Dnepr Group in Sept. The IL-76TD-90VD aircraft has been fitted with PS-90A-76 engines produced by the Perm engine manufacturer at a cost of US$4.3M each in an effort to meet Int'l Civil Aviation Organisation (ICAO) noise & emissions requirements to preserve its niche market. "The upgraded IL-76 will be the world's only civil aircraft capable of delivering outsized cargo to almost any of the world's airports, a situation which may last until 2020. Volga-Dnepr's efforts will prolong the life-cycle of the modernized IL-76 by some 20-30 years," said Andrey Pakhomov, the project's financial director.
***New Thai Tie ....... as World Airways said it will provide an MD-11F freighter & operate it on behalf of Thai Air Cargo, the recently formed joint venture between Thai logistics provider CTI Group & Australia's Qantas Airways, beginning in June. The freighter is scheduled to serve markets in Southeast Asia, China & Europe. The wet lease arrangement is valued at about US$21.6M for one year, with an option for a 2nd year.
***Dragons Over The U.S. ...... as Hong Kong-based Dragonair Cargo is starting its 1st ever transpacific flights at the beginning of April with the launch of a thrice-weekly Hong Kong/New York 747-400F freighter service.
***Chemo-Cargo...... as DHL Danzas Air & Ocean and Lufthansa Cargo have set up a joint-venture company to provide integrated end-to-end temperature controlled transportation solutions for the life science industry. A company statement said "LifeConEx," based in Miramar, Florida, will start operations on April 1 -- and will offer a service to the life science industry that integrates logistics solutions for their primary distribution to numerous destinations around the world, focusing on temperature-controlled end-to-end transportation along the supply chain. Customers of the life sciences industry cover pharmaceutical, biotech & healthcare services.
***"Hold" That Man! ...... as a young man loading baggage into an airplane in Milwaukee got locked in a Midwest Airlines cargo hold March 25 & stayed there on a flight to Philadelphia, Midwest Airlines officials said. "He was in the process of securing a wheelchair, tying it down," the airline said March 25 night, "and they didn't see that he was still in there when they closed the door." The man is a ramp agent who loads baggage & cargo. The cargo hold is heated & pressurized, so the unexpected trip to Philadelphia didn't hurt the man. "He knew where it was going," Midwest said. "He tried to get somebody's attention, but it didn't work. When it landed, he jumped out of the airplane and asked for a cigarette, so he was a little stressed but he was fine." He was flown back to Milwaukee, this time in the passenger compartment. "He wanted to finish his shift," Midwest said. "We told him he should go home & rest."
***Chirping Chinese ...... as China imported a U.S.-made scream machine to scare away the birds at Beijing airport -- except they didn't recognize the noises & refused to budge. The bird-dispersing equipment had recorded the screams of American birds or the sounds of the birds' natural enemies, the Beijing Evening News said. "Local birds did not understand the foreign language," the newspaper said. So Chinese experts "translated" the U.S. bird noises into those of their Chinese counterparts. "The workers have already recorded 6 or 7 bird screams which are common in Beijing," it said, adding that the new scare tactics were undergoing tests.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs _________________
***FIATA Fights Against NVOCC Tariffs ......... as the Int'l Federation of Freight Forwarders Assn.s (FIATA) told its members at a meeting in Zurich, Switzerland, it will renew its effort to eliminate the continuing tariff-filing requirements of non-vessel-operating common carriers in the U.S. However, FIATA has welcomed the introduction of confidential NVOCC service agreements (NSAs) by the U.S. Federal Maritime Commission, for which it had lobbied alongside UPS & others. NSA allows private contracts between NVOCCs & shippers, but the intermediaries must still file the NSAs with the FMC and file tariffs for non-NSA shipments. The Swiss-based federation of intermediaries said the NSAs "eliminate service contract discrimination for NVOCCs in the U.S.
***All But 7 ..... as the U.S. Coast Guard said 7 nations remain on its list of countries that have not complied with antiterrorism measures in their ports as required by the Maritime Transportation Security Act of 2002 and the Int'l Ship & Port Facility Security (ISPS) Code. The countries are Albania, the Democratic Republic of Congo, Guinea-Bissau, Liberia, Madagascar, Mauritania & Nauru. Vessels from those countries "during their last 5 port calls will be boarded at sea and subject to other port state control measures prior to being permitted to enter a U.S. port," the Coast Guard said in a statement. In this latest advisory, the Coast Guard said a minimum number of precautions must be taken on all vessels, including U.S.-flag ships, that visited one of the listed nations during their last five port calls -- or the ships will be denied entry into U.S. ports, effective May 23. Most severe treatment is reserved for Nauru, just as soon as it is identified.
***Grand Design ...... as China's Ministry of Communication has come up with a blueprint on development of the nation's ports over the next 15 years, Xinhua reported. According to the plan, the handling capacity of the nation's ports is expected to reach about 6.4 billion tons & 200 million TEU by 2020. In addition, 90% of the ports will then be automated, while the average capacity of cargo vessels is expected to be in excess of 600 tons. The Ministry estimated that China ports will handle in excess of 75 million TEU in 2005, an increase of about 22% over 2004, but the rate of increase will be smaller than that registered last year, the report said.
**Private Comrade Capitalists ....... as COSCO Container Lines is planning to follow fellow Chinese carrier, China Shipping Container Lines, with its own initial public offering on the stock exchange of Hong Kong. According to Reuters, the move is expected to raise more than US$1Bn for the government-owned shipping line. In June, China Shipping Container Lines raised US$1Bn from its IPO on the Hong Kong stock exchange, by selling a 40% stake in the formerly state-owned company to the private sector -- great result!
***Bright Idea For Pirates....... as NYK Line has introduced high illumination searchlights for its commercial vessels to help protect them from pirates & acts of terrorism. NYK said the "Jacklight" searchlights work effectively to irradiate & clearly identify suspicious unlit boats at a distance of up to 500 meters (1,640 feet). The 1st light was loaded on the 102,390-ton M/T Banshu-maru liquefied natural gas carrier March 26.
***De-Iced Ground Hog ...... as Capt. Feroze Irani of the M/V Pineglen was presented with ceremonial top hat at Lock 3 March 23, when the Welland Canal, the westernmost part of the St. Lawrence Seaway, officially opened for its 176th consecutive year of service. The Montreal-Lake Ontario section was opened Good Friday, March 25. The Seaway has opened on or before March 31 in 20 of the last 26 years and is now in its 47th navigation season.
***Inland Insufficient ........ as the American Society of Civil Engineers gave the U.S. inland waterway transportation system a "D-" in its 2005 Report Card for America's Infrastructure, released March 22. This grade is down from a "D+" issued by the society in 2001. "Of the 257 locks on the more than 12,000 miles of inland waterways operated by the U.S. Army Corps of Engineers, nearly 50% are functionally obsolete," the society warned in a statement. "By 2020, the number will increase to 80%." The society said inland waterways are an efficient way to transport large volumes of bulk commodities at a fraction of the cost of rail and trucks. "The poor condition of these systems threatens commercial traffic that affects our nation's economy," the society said.
***NYK has Lofty Goals ...... as it said March 23 it will invest US$13.8Bn in new vessels to expand its fleet from 660 ships to 880 vessels by March 2011 and outlined a strategy of becoming "a logistics integrator." which it defined as "one that offers integrated logistics services through the use of the world's leading hardware -- covering our ships at sea, trucks and rail on land and planes in the sky -- and software -- via our electronic Int'l transport network." NYK employs 33,000 & operates 660 ships in the container, car transport, liquefied natural gas, tanker, dry cargo, specialized cargo & cruise industry worldwide.
***LA/LBG A Little Less....... as Trans-Atlantic Conference Agreement said March 24 it would not reinstate its Los Angeles-Long Beach port congestion surcharge of US$200 per TEU at least until the end of April. TACA had implemented a congestion charge at the Californian ports from Nov. 15 through Feb. 15, when it suspended it until further notice.
***Puerto Rico A Little More ...... as Horizon Lines is increasing its rates for dry equipment in the southbound U.S./Puerto Rico trade an average of US$150 per container starting mid-April.
***Out In The Wildest West ....... as Vladivostok-based Far Eastern Shipping Co. has launched a 12-day service between Busan & Sakhalin Island. The "FESCO Korea Sakhalin Line" service has a port rotation of Busan, Korsakov, Kholmsk and back to Busan. The ports of Ulsan & Masan are called on inducement. The "FKSL" deploys one multipurpose vessel, the 558-TEU M/V Pioneer, capable of handling heavy lift, breakbulk, roll-on/roll-off & transshipments from North America, Europe & Asia. Personal weapon included in passage.
***Mea Culpa List ....... as the U.S. FMC has collected US$514,500 in civil penalty compromise agreements from 16 ocean transportation intermediaries, one NVOCC & one propriety shipper. The agency assessed the penalties against these firms for various alleged violations of the 1984 Shipping Act & other commission rules. The FMC said none of the parties admitted guilt to the violations. They are:
* City Ocean International of Walnut Creek, Calif., US$60,000.
* Perfect Express Corp. of Bensenville, Ill., US$52,500.
* Global Alliance Logistics (LA) of Inglewood, Calif., $50,000.
* Quality Express USA of Jamaica, N.Y., US$45,000.
* Formerica Consolidation Services of Jamaica, N.Y., US$25,000.
* Transporte Medrano of Hempstead, N.Y., US$25,000.
* Asia Pacific Express Co. Ltd. of Hong Kong, US$22,000.
* Almar USA Corp. of Miami, US$20,000.
* Elite Shipping of Miami, US$20,000.
* Montero Shipping Co. of Bronx, N.Y., US$20,000.
* Monumental Shipping & Moving Corp. of East Elmhurst, N.Y., US$20,000.
* Williams Caribbean Shipping and Delivery Services of New York, US$20,000.
* Robert A. Pfeiffer of Monroe, N.J., US$17,500.
* Carga Tica Int'l of Miami, US$15,000.
* Cibao Cargo of New York, US$15,000.
* Francisco Rodriguez of New York, US$15,000.
*Frontier Liner Services, the Miami-based vessel-operating common carrier cited for Shipping Act violations, agreed to pay a US$55,000 civil penalty, and
*Woodland Hills, Calif.-based shipper InterWorld Industries agreed to pay a US$17,500 civil penalty for its alleged wrongdoing.
***FMC Revoked 2 OTI Licenses ........ as for failure to maintain valid bonds, they are: Seagate Container Line of Seattle, & Uni Int'l, America Corp., Clearwater, Fla.
***Union Pacific Corp. Easing Los Angeles/Long Beach....... as it is in talks to increase capacity at its intermodal container transfer operation near Port of Los Angeles. UP said it was in discussions with port authorities on expanding its intermodal capacity to handle an estimated 1.6 million marine containers annually. The nation's largest freight railroad said the increase could eliminate 500,000 truck trips annually from area highways. UP rival BNSF Railway Co. said in early Feb. it planned to build a US$130M, 157-acre intermodal transfer facility near the Ports of Los Angeles & Long Beach, the nation's busiest ports. Thanks to God.
***Port of Long Beach Also Helps ..... as it has broken ground on a US$63.5M project to ease traffic congestion across Terminal Island along a critical routing for ocean containers. "About 15% of all U.S. waterborne cargo containers moves through the Ocean Boulevard & Terminal Island Freeway interchange," the port said . When completed, the project will reduce traffic delays by 5,600 vehicle-hours per day, said the Long Beach Board of Harbor Commissioners. The construction to be finished in Feb. 2007. Here in LA -- this news is a big gift -- affected 15% of all U.S. containers!
***Throughput >>> Dubai Ports Authority saw container throughput for 2004 increase 24.7% to a record 6.4 million TEUs, compared to 5.2 million in 2003. >>> Port Authority of New York & New Jersey said its bi-state port handled 4.48 million TEUs in 2004 up 10.1% over 4.07 million TEUs in 2003. >>> Port of Long Beach handled 497,925 TEUs in Feb., a 58.2% rise over the same month in 2004. >>> Port of Seattle container traffic rose 20% in 2004 to 1.8 million TEUs. >>> Italian port of Taranto handled 763,318 TEUs in 2004, a jump of 15.9% compared to 2003. >>> Port of Tuticorin, operated by PSA Sical Terminals Ltd., jumped 25% to nearly 300,000 TEUs in 2004, representing a record for the Indian port.
***This Lady Knows Her Cars ...... as Pasha Hawaii Transport Lines' M/V Jean Anne was christened at Port of San Diego on March 21, 2005. Built to service the needs of the automotive manufacturing, rental car, private vehicle owners, over-sized & rolling stock markets -- M/V Jean Anne is the 1st Pure Car Truck Carrier (PC TC) to be built in the U.S., & the 1st PCTC vessel to service the Continental U.S. - Hawaii market. Great Web presentations.
***M/V Green Goddess ..... as Wallenius Wilhelmsen Line officials believe this is what an environmentally friendly ro/ro ship might look like in the future. It would use a combination of renewable energy sources, including sun, wind & waves, as well as fuel cell technology, to meet all propulsion and onboard power needs. Solar energy would be harnessed through photovoltaic panels in the vessel's 3 sails, which also help propel the ship using wind power. These sails are made with special lightweight composite materials. Wave power would be used through a series of 12 fins, which would convert wave energy into hydrogen, electricity or mechanical energy. Wallenius Wilhelmsen said the vessel could transport up to 10,000 cars, about 50% more than today's car carriers, while having the same weight in tonnage terms. The company would use lightweight materials, such as aluminum & thermoplastic composites. The hull would also be built to eliminate the need for ballast water tanks. Great Web presentations.
***This Month In U.S. Navy History ........
1799 - USS Constitution recaptures American sloop Neutrality from France.
1813 - USS Essex takes the Peruvian corsair ship Nereyda, marking the 1st capture by the Navy in the Pacific.
1815 - USS Hornet captures HMS Penguin in a battle lasting 22 minutes.
1854 - Commodore Matthew Perry opens treaty negotiations with Japan.
1880 - USS Constellation departs New York with food for famine victims in Ireland.
1898 - Assistant Secretary of the Navy Theodore Roosevelt proposes the Navy investigate the military application of Samuel Langley's flying machine, beginning naval aviation.
1903 - George Dewey is commissioned Admiral of the Navy with the date of rank, March 2, 1899. He was the only person to hold this rank.
1915 - F-4 (SS 23) becomes the first American submarine casualty, sinking off the coast of Honolulu.
1917 - USS New Mexico (BB 40) is launched as the first dreadnought with turboelectric drive.
1942 - In a Motor Patrol (PT) boat, Lt. Cmdr. John Bulkeley leaves the Philippines to take Gen. Douglas MacArthur to Australia.
1946 - USS Missouri (BB 63) departs the U.S. to return the body of a deceased Turkish ambassador to Turkey for burial. Missouri arrived in Istanbul April 5.
***Grey Poupon & A Night Train Bottle ...... as the 75ft. diving & excursion F/V Conception was stolen from Santa Barbara Harbor by a homeless man who later abandoned her on the beach at Vandenberg U.S. Air Force Base some 40 miles North. Donald Patrick Kelley, 41, who had a jar of Grey Poupon from the boat's galley in his pocket, was arrested a quarter-mile from rocky beach where the US$1M vessel was beached. March 27 -- U.S. Coast Guard still trying to refloat the vessel. Hot dog not found.
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.
See our new photo feature for March 2005: "Catch of The Day"
See our newest photo feature "Singles Only" - Transportation Disasters Told In A Single Photo!
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"
Here are our suggested world wide web sites of the week for your business, your information and your amusement..............
Are Web Services The Future of Supply Chain Computing?
BNSF Railway Co. .......online method for carload customers to obtain instantaneous interline prices.
Brinks & BAX
Continental Airlines Cargo
Deep Mystery: Finding HMAS Sydney
Extremely Hazardous Materials Transportation Security Act of 2005
How To Avoid RFID Mistakes
Port of Los Angeles ........ new & improved site.
Trade Support Network ....... comprising industry representatives tasked with developing industry requirements for the Automated Commercial Environment computer system that will eventually replace the Automated Commercial System currently in use to process U.S. imports.
U.S. Int'l Trade Administration's (ITA) Trade Information Center .......... step by step guide to exporting, trade agreements, trade terms & more.
Ocean RateBuilder ........ enables ocean carriers to manage open tariff rates, contracts & rate agreements in all trade lanes with one application
Carrier 411 ........ what are the rates of your motor carriers? Do they have insurance? 30-day free trial.
Trends in Third-Party Logistics Provider Supply Chain Systems Purchasing, Deployment, and Use
UK Logistics Buyers Gude
World Trade Organization Events
7th eyefortransport North American Technology Forum .......... April 25-26 in Chicago.
14th Annual Int'l Air Cargo Conference & Exhibit- Houston 2005........17 to 19 May 2005 (National Transportation Week). At IACC- Houston 2005.
Info available from...... firstname.lastname@example.org
23rd Annual D/C EXPO ............ May 17-19 at Navy Pier, Chicago.
Int'l Air Cargo Assn. (TIACA) ....... April 10-12 2005 -- Annual General Meeting & Expo -- Istanbul
Sea Cargo Americas ........ May 11 & 12 2005, Miami.
Seaport China 2005-Transport ....... May 26-28, 2005, Exhibition of International SeaTransport Services Industry, China Int'l High-Tec Fair Exhibition Center (Shenzhen)
Shipping Risk Management ....... 2-day course will be held in London, Hamburg, Athens, Hong Kong & Singapore during 2005.
Supply Chain Software & Systems D/C Expo ..........May 18 - 19, Chicago
Supply-Chain World-North America 2005 Conference & Exposition ......... April 4-6, 2005, Disneyland Hotel, Anaheim, Ca. USA
TLS CEE Congress ..... in Prague at the Veletrzni Palac, 29-30 Sept. 2005
U.S. Bureau of Customs and Border Protection Customs-Trade Partnership Against Terrorism (C-TPAT) Supply Chain Security Training Seminar .......... "Supply Chain
Security in a New Business Environment ........ Miami, Florida, April 18-21, 2005. C-TPAT members only. Free.
Zaragoza Supply Chain Summit ........May 31 - June 1, 2005, Zaragoza, Spain -- "Beyond Offshoring: The Road to Globalization."
From Contented Cows
Delivery ..... a short film
Queen Mary Ghost Tour
San Diego Aircraft Carrier Museum
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _______
Johnson Vs. Seacor Marine Corp.
5th Circuit Court of Appeals
March 23, 2005, No. 03-31005
Maritime Indemnity Contract: The U.S. Court of Appeals for the 5th Circuit ruled that a maritime indemnity contract was supported by consideration and, thus, enforceable. In the instant case, defendant vessel operator had contracted with two oil companies to deliver equipment, supplies, and personnel to the companies' offshore rigs. Plaintiff labor contractor contracted with the oil companies to provide workers for those rigs. Defendant vessel operator advised plaintiff that it would not transport plaintiff's employees unless plaintiff signed a maritime indemnity contract, agreeing to defend and indemnify defendant if it were sued by plaintiff's employees for personal injuries allegedly incurred on defendant's vessels. Plaintiff signed the maritime indemnity contract and defendant provided transportation to plaintiff's employees. When several employees brought personal injury suits against defendant, plaintiff argued that it was not obligated to defend and indemnify defendant because defendant was under a preexisting duty to transport the employees and there was no independent consideration to support the indemnity contract. The court held that the preexisting duty rule is disfavored and that any consideration, no matter how slight, is sufficient to sustain a contract in this instance. The court held that, while defendant did not incur any additional obligation under the maritime indemnity contract, the plaintiff gained the right to require specific performance, which right it did not have until execution of the indemnity contract. Read the opinion.
Keytrade USA Vs. M/V Ain Temouchent
5th U.S. Curcuit Court of Appeals
March 23, 2005, No. 04-30370
Bill of Lading Incorporates Charter Party Arbitration Clause: The U.S. Court of Appeals for the 5th Circuit ruled that a bill of lading incorporates a voyage charter's arbitration clause. In the instant case, the voyage charter included a provision requiring disputes to be arbitrated in London. The bill of lading for the cargo included an arbitration incorporation clause, but the particulars identifying the actual charter party were not filled in on the bill of lading. When the cargo was delivered 16 days late, the consignee brought suit in federal court. The district court refused to compel arbitration, finding that the charter party had to be specifically identified in the bill of lading for such an order. The appellate court reversed, holding that the bill of lading was in the hands of the charterer & there was no confusion concerning who was the charterer or which charter party the bill of lading sought to incorporate. Read the opinion.
Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News, Lloyds & other world sources.
The Cargo Letter Correspondents:
Michael S. McDaniel Esq, Editor (Countryman & McDaniel)
David Schuchman -- Interpool Corp. -- Webmaster of The Cargo Letter Archive
Libby Thompson (Countryman & McDaniel)
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