Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
30 April 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 April 2005.
READERS NOTE: 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
To help you find what you need -- FAST -- there's now a transport search engine installed at our Cargo Law.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 &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 _____________
***Chinese Textile Flood ....... as EU Trade Commissioner, Peter Mandelson, announced that the EU executive had decided to launch an investigation into Chinese textile imports, which have surged in some cases by up to more than 500%. The probe, which is not expected to be completed before June, could lead to possible safeguard restrictions on mainland clothing imports. Mr. Mandelson has urged China to impose restrictions on its own textile exports by raising export duties. So goes WTO.
***Chinese Textile Flood ...... as the U.S. Court of Appeals for the Federal Circuit has lifted an injunction issued by the Court of Int'l Trade that prohibited the U.S. government from ruling on 12 threat-based China safeguard petitions filed by the U.S. textile industry in 2004. The appeals court issued its stay one week before hearing oral arguments May 5 on the same injunction. Judge Richard Goldberg of the Court of Int'l Trade issued the injunction Dec. 30, 2004, effectively blocking any implementation of threat-based China safeguards by the Bush administration acting through the Committee for the Implementation of Textile Agreements (CITA). The three-judge appellate panel disagreed with Goldberg on the issue of who would suffer irreparable harm if safeguards were imposed: apparel importers or the government. "We find the injuries identified by the government sufficiently irreparable, substantial, and tied to the public interest," the appeals court said. The stay of Goldberg's injunction allows CITA to rule on safeguard petitions, and issue restrictions covering U.S. imports of Chinese-made trousers, shirts & underwear in as little as 1 to 6 weeks. China's trade surplus with the U.S. hit a record US$162Bn last year on goods, the biggest U.S. deficit with any country ever.
***U.S. Trade Deficit In Orbit ...... as aggravated by surging imports of oil and textiles, it soared to an all-time high of US$61.04BN in Feb. The Commerce Dept. said that the Feb. imbalance was up 4.3% from a US$58.5Bn trade gap in Jan. as a small US$50M rise in U.S. exports of goods and services was swamped by a US$2.58Bn increase in imports.
***Hong Kong's Trade Deficit ....... as the total value of goods exported in March increased by 3.5% over a year earlier to HK$168.7 billion (US$21.63BN), according to the Census and Statistics Dept. of Hong Kong. The figures also show that the value of imports during March rose 2.5% to HK$182.5Bn, resulting in a trade deficit of HK$13.8Bn. Re-exports grew 4.9% to HK$160.6Bn in March, while the domestic export value fell 17.2% to HK$8Bn.
***FTAA Stalled Says U.S. Government Accountability Office (GAO) ...... new report saying the impasse over stalled negotiations for an agreement creating a Free Trade Area of the Americas (FTAA) remains unbroken. If completed, the Free Trade Area of the Americas agreement would encompass an area of 800 million people & about US$13 trillion in the production of goods and services. The 44 nations of the Western Hemisphere formally launched negotiations for a free trade area agreement in 1998.
***U.S.-Cuba Trade Association Web ....... as a group of about 35 agricultural shippers, industry associations & other interests have formed a group that focuses on improving trade relations between the U.S. & Cuba. Some of the group's members are ADM, American Italian Pasta Co., Cargill, Caterpillar Americas, Cuba Trade Coalition, Millar Farm Exports, North Dakota Farm Bureau, Texas Port of Galveston, San Juan Navigation, USA Rice Federation, & U.S. Wheat Associates.
***Stopping Enron East ....... as China has announced it was banning executives at major state-owned companies from buying government shareholdings, acting to prevent theft of state assets as the country moves to reform its stock markets. The ban on management buyouts follows news that the government has endorsed a plan for trial sales of state-owned shares in hopes of lifting stock prices. China's stock market regulator said earlier that the government would proceed cautiously with stock market reforms to avoid hurting investors' interests.
***The Benefits Of Our Wake Up Call....... as introduction of the Int'l Ship & Port Facility Security (ISPS) Code & its regulatory cousins, the Container Security Initiative (CSI) and Customs-Trade Partnership Against Terrorism (C-TPAT) in recent years are having a positive impact on traditional cargo crime, according to Int'l transport & logistics insurer, the TT Club. The TT Club highlights the benefits of introducing anti-terrorism measures by stressing that such post 9-11 actions had led to reduced delays, increased safety, improved processing times, & resulted in fewer losses due to theft.
***Tougher Sell ....... as U.S. Customs & Border Protection, fresh from issuing tougher criteria for importers wishing to participate in the Customs-Trade Partnership Against Terrorism, will probably turn its attention to carriers next, Christopher Koch, president of the World Shipping Council said this month. C-TPAT is a voluntary supply chain security program that includes brokers, carriers, logistics providers, foreign manufacturers, port terminals and port authorities. Koch, who is a member of the Advisory Committee on Commercial Operations to CBP and the Dept. of Homeland Security, said CBP will probably focus on moving from voluntary guidelines & best practices to stricter standards for carriers to follow.
***Grain Trust ....... as the U.S. Dept. of Agriculture's Grain Inspection, Packers & Stockyards Administration will waive the mandatory inspection & weighing requirements for specialty grains exported in containers. The agency said the rule is consistent with the U.S. Grain Standards Act, and will be in effect for a maximum of 5 years. "Containerization allows the producer or processor to extend control of the product from the field to customer, rather than fields to local terminal elevators or export port elevators where commingling can occur," the agency added.
***Toll Gate? ...... as nearly 60% of people who enter the U.S. in the San Diego area would pay US$3 for a speedier trip from Mexico, according to a new survey that comes as heightened security measures stir fears that the economy will suffer if waits become intolerable. The poll by the San Diego Assn. of Governments & California Transportation Dept. found that 59.4% of border crossers would pay US$3 at a proposed port of entry in San Diego's Otay Mesa district. Another 14.2% would pay occasionally, while 26.5% would avoid the toll. Texas has 8 toll crossings at the Mexican border, operated by city & county governments. California has none.
***Am-Can Pre-Clearance ....... as formal negotiations between the Dept. of Homeland Security & Canadian officials to set the parameters for a pre-clearance system pilot program that would relocate U.S. primary & secondary inspection stations to the Canadian side of the border are expected to begin in May. As previously announced, the U.S. facility would be located on the Canadian side of the Peace Bridge that connects Fort Erie & Buffalo, N.Y. Canada will also station inspectors on U.S. soil under the reciprocal agreement, but a location has yet to be determined, Dezenski said. DHS has stated that the Thousand Islands Bridge or the Queenston-Lewiston crossing are among those under consideration for the Canadian facility.
***UPS Supply Chain Solutions' Next 23 Locations In China ....... as the forwarding & logistics giant has opened an office in Tianjin, an industrial port city in north China, Xinhua reported. UPS-SCS will lease a 2,000 square meter space in the Tianjin Economic & Technological Development Zone, a dedicated logistics area in Tianjin. UPS-SCS has made an extensive expansion in China this year, having launched new services or offices in Shanghai, Guangzhou, Shenzhen, Qingdao & now Tianjin. The article said that UPS-SCS plans to establish a presence in another 18 mainland cities by the end of the year. More, UPS Supply Chain Solutions is building a 425,000-square-foot distribution & logistics hub within Singapore's Airport Logistics Park.
***DFDS Transport of Denmark ....... as the subsidiary of the DVS Group, has signed an agreement to acquire Germany's Imperial Logistics Int'l Group's subsidiary, Bachmann, in a bid to strengthen its global air & sea activities. Bachmann Group of companies is a sizeable player in the trade between the Asia-Pacific region & Europe, with a history of trading with the U.S. & South America. DSV Group said it intended to integrate Bachmann into DFDS Transport's Air & Sea division within 3 years.
***Exel Cleans Up ....... as the U.K.-based provider of logistics services has completed the disposal of Cory Environmental, its recycling & waste management unit. Montagu Private Equity bought Cory from Exel for US$381.2M, plus a further US$9.5M of "deferred contingent consideration," Exel said. Cory operates at 30 locations in the United Kingdom, providing services for the collection 7 disposal of waste as well as municipal cleaning.
***Power2Ship Intermodal Sails On ...... as it has completed the acquisitions of GFC inc. New Jersey-based GFC, Inc. is a non-asset based intermodal drayage company with revenues of approximately US$5.7M in 2004. The newly established Power2Ship Intermodal unit plans continued growth of the former GFC network of agents which has provided services along the U.S. eastern seaboard ports.
***No Need For Roadside Assistance ....... as the American Trucking Assn. advanced seasonally adjusted for-hire Truck Tonnage Index decreased 3.3% in March, corresponding with the modest economic slowdown that has appeared in other economic data in recent months. On a seasonally adjusted basis, the tonnage index fell to 111.3 (2000=100), following a revised 2.9% drop in Feb. The index was 0.4% lower than a year earlier, its 1st year-over-year decrease since Nov. 2001. On a not-seasonally adjusted basis, the tonnage index increased 12.1% from Feb.
***FedEx Freight Goes Way Up ...... as the the less-than-truckload (LTL) subsidiary of FedEx Corp. will implement a 5.6% general rate increase effective May 16, 2005. The increase will apply to interstate & intrastate traffic, and selected shipments between the U.S., Mexico & Canada.
***Green Rail ....... as Union Pacific Railroad said it was basing its first low-emissions diesel-hybrid locomotive in California to help reduce emissions. The locomotive, to be used in UP's Fresno, Calif. yard, is powered by banks of storage batteries, and when the locomotive is not running, a small diesel engine on board will recharge the batteries, UP said. UP said the unit, the world's largest hybrid land vehicle in production, will cut emissions by 80% to 90% and reduce diesel use by 50% to 80% compared to a conventional diesel locomotive.
***Eurotunnel -- Empty Hole? ....... as it has announced that creditors had agreed to a waiver allowing the near-bankrupt operator of the undersea rail tunnel linking Britain & France to re-negotiate its 9 billion euros (US$11.7Bn) debt without triggering a default.
***Closer Europe ....... as Swiss engineers linked Europe's north & south by completing drilling April 29 for the world's longest overland tunnel - a cavernous shaft that burrows under the Swiss Alps and will shave an hour off the travel time for skiers in Germany heading down to resorts near the Matterhorn. The 21-mile Loetschberg tunnel is the latest in a string of engineering feats - from the Channel Tunnel linking France to England to a bridge spanning Sweden & Denmark - that are breaking down natural barriers in an increasingly borderless Europe. The Loetschberg, set to open to trains in 2007, will be longer than the current overland record-holder - Japan's 16.4 mile Hakkoda Tunnel - and will come 3rd overall behind the underwater 33.5-mile Seikan Tunnel, also in Japan, & the 31.3-mile Channel Tunnel. It will trim to under two 2 hours the time trains will need to cross between Germany and Italy, a journey that now takes 3.5 hours. The Loetschberg has been dug parallel to an even more ambitious project - the 36-mile Gotthard Tunnel, which will be the world's longest when it is completed over the next decade or so. For Swiss taxpayers - who are footing the bill for the twin, multibillion-dollar projects - the main selling-point is that they will move heavy European Union trucks off narrow highways & onto trains. Trips across Switzerland will be shorter, because trains won't have to make slow, switch-back climbs to reach older tunnels. And the new track with rails cushioned on rubber will be suitable for high-speed trains from Germany, France & Italy. To dig the Loetschberg, some 16 tons of explosives were used & enough rock was excavated to pack a freight train 2,500 miles long, stretching across Europe from Lisbon, Portugal, to Helsinki, Finland.
***Don't Pick Up Your Forgeries While In China ...... as a Chinese court last week convicted two U.S. citizens for selling pirated motion picture DVDs & sentenced them to jail. The Motion Picture Association of America estimates that the U.S. movie industry loses over US$3.5M annually in potential worldwide revenue due to trade in counterfeit films. Randolph Hobson Guthrie III, 38, & Abram Cody Thrush, 30, were arrested in Shanghai last July with help from U.S. Immigration & Customs Enforcement. This is the 1st joint intellectual property rights investigation by ICE agents & Chinese authorities. It began when ICE agents purchased counterfeit DVDs at a Mississippi flea market & tracked the origin of the products to China. Chinese authorities seized more than 210,000 fake movie DVDs & US$94,000 in Chinese & U.S. currency. Guthrie was sentenced to 30 months in jail and fined US$60,500. Thrush received a 1-year sentence & US$1,200 fine. Both men are to be deported after completing their jail terms. No actual Chinese counterfeiter was inconvenienced during the operation, as that never seems to happen. The problem is out of control.
***Blessed Transport?...... as a used car once said to be registered in the name of Joseph Kardinal Ratzinger -- the new Pope Benedict - is up for sale on eBay and the sky seems to be the limit when it comes to bidding. The vehicle, a metallic gray 1999 Volkswagen Golf, with 47,000 miles, went up for auction on the German site (www.ebay.de) at a minimum price of 9,900 euros ($12,790) April 28 and, just over 24 hours and more than 300 bids later, the price had temporarily hit 1 million euros (US$1.3M). German Web Site n-tv.de identified the seller as Benjamin Halbe, 21, from the town of Olpe in Germany's Sauerland region, who said he bought the car from a local dealer in Jan. This is just for the poster!
2. The Cargo Letter Financial Page ______
It's Time For 1st Quarter Industry Results --
**AMR Corporation. DOWN as parent company of American Airlines, reported a net loss of US$162M for the first quarter, which included a benefit of US$69M related to certain excise tax refunds. Without this tax credit, AMR would have recorded a net loss of US$230M.
**Arkansas Best Corp. UP as parent of less-than-truckload carrier ABF Freight System earned US$10.5M or 41 cents a share in the 1st quarter, up from US$4.5M or 18 cents last year.
**Burlington Northern Santa Fe Corp. UP with 1st-quarter net earnings of US$321M or 83 cents a share, up from UP$193M or 52 cents a year earlier.
**Cargolux. UP as net profit for 2004 increased by 18% to US$83.5M, compared to the previous year.
**China Eastern Airlines. UP with a profit for 2004 of US$62.2M, a significant turnaround from its 2003 net loss.
**C.H. Robinson Worldwide Inc. UP as net income for 1st quarter was US$41.8M or 48 cents per share, up from US$29.1M or 34 cents a year earlier.
**CMA-CGM Group. UP as net profit in 2004 more than doubled to US$537.17M while its revenue rose 30%.
**Continental Airlines. DOWN with a 1st quarter 2005 net loss of US$192M, which includes a net special gain of US$8M related to the
company's defined benefit pension plan.
**Covenant Transport. DOWN as an unexpected fall in freight demand resulted in net loss of US$649,000 in the 1st quarter of 2005, a sharp contrast to the net profit of US$721,000 it made in the same period 2004.
**Delta Airlines. DOWN with a 1st quarter net loss of US$1.1Bn, compared to a loss of only US$383M in the same period last year.
**Emirates Group. UP as net profit for the parent company of Emirates Airline surged 49% over previous year to record-breaking US$708M for financial year ended March 31, 2005.
**Forward Air Corp. UP as 1st-quarter net income was US$8.7M or 27 cents per share, compared with US$6.8M or 21 cents in last year's 1st quarter.
**Grupo TM. UP with 1st quarter net income of US$155.8M up from a net loss US$9.1 million the previous year.
**Hanjin Shipping. DOWN as net profit drops 8.6% in 1st quarter to US$146M.
**Hub Group Inc. UP with record 1st quarter net income of US$5.3M, a 97% increase from US$2.7M in the year earlier period.
**LAN Airlines. DOWN with net income of US$46.3M for the 1st quarter of 2005 compared to US$48.1M in 2004.
**Landstar System Inc. UP as 1st quarter it earned a record US$17.9M or 29 cents a share, compared with US$8.1M or 13 cents a year earlier.
**Matson Navigation. UP as operating income 60% to US$29.7M in 1st quaer.
**Norfolk Southern Corp. UP as parent of Norfolk Southern Railway Co., raise its 1st quarter net income 23% to US$194M from US$158M in the year-earlier quarter.
**Overnite Corp. UP as net income rose to US$11.4M or 40 cents a share for the 1st quarter, up from US$7.5M or 27 cents a year ago.
**Ryder System Inc. UP with 1st-quarter net income of US$41.5M or 64 cents a share, compared with US$35M or 53 cents a year earlier.
**Southwest Airlines UP as net income rose 192% to US$76M in 1st quarter, from US$26 million, despite the surge in fuel prices that is taxing the Int'l airline industry.
**Swift Transportation Co. Inc. UP as net earnings tripled to US$19.4M or 26 cents per share for the first quarter of 2005, compared to US$6.4M or 8 cents per share for the first quarter of 2004.
**Target Logistics Inc. UP as net income 3rd quarter ended March 31 was US$264,894 or 1 cent per share, compared with US$114,981 or 1 cent a year earlier.
**Union Pacific Corp. DOWN with lower income for 1st quarter, as its net income dropped to US$128M or 48 cents a share, compared with US$165M or 63 cents last year.
**UPS, Inc. UP as net income rose 16.2% to US$882M during the 1st quarter of 2005 ended March 31, compared to the same period a year ago. UPS boosted its revenue 11% to US$9.9Bn in the 1st quarter following its takeover of Menlo Worldwide Forwarding, but the newly acquired forwarder is said not to have played part in increasing the giant express parcel operator's net income, which rose 16%.
**USF Corp. DOWN with a net loss of US$5.8M or 20 cents a share for its 1st quarter ended April 2, compared with income of US$7.1M or 26 cents a year earlier.
**UTi Worldwide Inc. UP as net income for the quarter ended Jan. 31 jumped 53% to US$18.6M, compared to same period in 2004.
**Zim Integrated Shipping Services Ltd. UP as net earnings rose 269% to US$172M in 2004, from US$47M in 2003.
***The U.S. Economy ....... as it grew at an annual rate of 3.1% in the 1st quarter, down from a revised 4th-quarter rate of 3.8%, the Commerce Dept. said April 28.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs __________
***Slowing Volume? ........ as world air cargo traffic slowed to 0.8% in March, when measured in freight-ton kilometers, according to the latest monthly statistics of Geneva-based Int'l Air Transport Assn. "While it is too early to identify a slowing trend in freight traffic, we need to watch this development closely over the coming months," said Giovanni Bisignani, director general and chief executive officer of IATA. The year-to-date figures show a 4.2% rise in freight ton kilometers.
***U.S. & India Open ...... as the parties have signed an "open skies" aviation agreement. The document was signed by the U.S. Secretary of Transportation, Norman Mineta, and Indian Civil Aviation Minister, Praful Patel, during a recent visit to the Indian capital, New Delhi. A statement from the U.S. Dept. of Transport (DOT) said Delta Air Lines has announced new daily service between New York & Chennai while Northwest Airlines plans new flights between Minneapolis & Bangalore. More recently, Continental Airlines said it planned to launch a new flight between Newark & New Delhi which will be the 1st regularly scheduled non-stop service between the U.S. & India. The new accord replaces an old agreement signed in 1956 that placed restrictions on services between the countries, including limits on cities that could be served & restrictions on pricing. The deal also allows cargo carriers to operate in either country without directly connecting with their homeland.
***United They Stand? ....... as in a move designed to help its exit from bankruptcy, UAL Corp., the parent company of United Airlines has reached an agreement with the Pension Benefit Guaranty Corp. (PBGC) to terminate all of United's defined benefit pension plans. The agreement is subject to approval by the U.S. Bankruptcy Court. UAL's trial with the U.S. Bankruptcy Court is scheduled to begin May 11.
***Pending Nuptials? ...... as David Bronner, Chairman of US Airways Group confirmed the airline is in discussions with Phoenix-based America West Holdings Corp. about forming a combined airline, according to the Associated Press. Several news organizations are reporting that the likeliest scenario is for America West to invest US$100M in US Airways, which plans to emerge from bankruptcy protection later this year, rather than an outright merger.
***Big Bird --The A380 ....... as European aircraft manufacturer Airbus' superjumbo A380 aircraft made its 1st test flight April 27, with a crew of 6 -- and 20 tons of test equipment, from its production site in Toulouse, France. The 3-deck long-range freighter version, the A380F, will be able to carry up to 152 tons of cargo on standard pallets over distances of up to 5,600 nautical miles (10,400 km). From California to Florida, U.S. workers in more than 30 states have produced A380 parts & systems ranging from the smallest (fasteners by Textron Fastening Systems in Santa Ana, Calif.) to some of the largest (the main landing gear by Goodrich). "The United States is the largest single supplier country to Airbus, making Airbus the largest export customer for the U.S. aerospace industry," said Allan McArtor, Chairman-Airbus North America Holdings.
***New Check Book Buys American ...... as fresh out of bankruptcy, Air Canada will spend at least US$6Bn to burnish its image & operations by purchasing new Boeing aircraft that are more modern & fuel efficient than its current planes. Air Canada is to renew its wide-body fleet with up to 36 Boeing 777s & 60 Boeing 787 Dreamliners in a move to modernize its existing fleet and improve operating efficiencies.The aircraft manufacturer, Boeing, said an agreement had been reached with the air carrier which includes firm orders for 18 777s, plus purchase rights for 18 more, in a yet-to-be-determined mix of the newest 777 models: the 777-300ER, the 777-200LR Worldliner, and the 777 Freighter.
***Cathay Pacific Takes Out The Seats ..... as the Hong Kong carrier held a ceremony April 28 in Xiamen to mark the start of work of the 1st ever conversion of a Boeing 747-400 passenger aircraft into a freighter, the Boeing 747-400SF, or Special Freighter. The prototype 747-400SF is being converted at the Taikoo Aircraft Engineering Co. Ltd. engineering works in Xiamen from a former Cathay Pacific passenger aircraft. It will be completely gutted & rebuilt inside with new structural beams and a stronger floor able to support the weight of more than 113 tons of freight. Cathay Pacific has signed up for at least 6 and as many as 12 of the 747-400SF aircraft.
***Brown Goes Long ....... as UPS has started a new non-stop service from the U.S. to Guangzhou on the mainland, making it the 1st express & cargo carrier to operate out of the new Baiyun Int'l Airport, and the 1st to offer non-stop flights between the southern mainland city and the U.S. UPS is flying 6 days a week between the U.S. & Guangzhou, which is one of the world's fastest growing manufacturing regions which accounts for 30%-to-40% per cent of China's foreign trade. The rights to operate the flights are part of 12 additional frequencies awarded to UPS last Nov. by the U.S. Dept. of Transportation (DOT) following the aviation agreement between the U.S. & China.
***China Southern Airlines Best? ....... as the largest airline in The People's Republic of China, has been named the Best Air Cargo in China at the 1st Annual Cargonews China Awards, presented as part of the 19th Annual Asian Freight & Supply Chain Awards (AFSCAs). China Southern Airlines Cargo was recognized by a free vote of the readers of Cargonews China for excellence in its field and based on a numbered ballot ensuring a strict single vote by the registered readers of Cargonews China. "Cargonews" would make a good Internet name.
***DFDS Transport Air & Sea Holding Gets Haring ........ as this member member of the DSV Group has entered into an agreement with Joachim Dohla to acquire Haring Aircargo GmbH. The parties did not disclose the price. Haring Aircargo has an annual turnover of US$18.16M & employs 40 people at its operations located in Frankfurt, Dusseldorf, Stuttgart, Munich & Cologne.
***Target Logistics Targets Vietnam ....... as the U.S. domestic & Int'l freight forwarder & logistics provider is expanding its network in Asia with a new station in Vietnam. TLSI has appointed Sky Logistic Services, Ltd., an experienced logistics companies in Vietnam, as its exclusive agent.
***Kalitta Air Comes Through ........ as after 2.5 years of hard fought negotiations, a tentative agreement was reached between Teamsters Local 747 and Kalitta Air on April 15, 2005. The new agreement calls for a 15% pay increase over the 3-year span of the contract, with an additional signing bonus of 4% for the previous 2 years. The agreement also provides enhanced retirement benefits & improved work rules. Kalitta.
***Got A Light?....... as starting this month, air travelers will have to leave their lighters at home. Unlike guns, knives and other dangerous items that a passenger cannot carry aboard but may stow in checked bags, lighters are banned everywhere on a plane. The rule change is expected to produce a large number of seizures of lighters even though airports, airlines and the government have been telling travelers for the past 45 days about the impending ban. Thousands have applied for the lighter concessions at destination airports.
***Pond Scum ....... as 13 cargo handlers at San Francisco Int'l Airport were charged April 15 with stealing US$200,000 worth of computers, cameras & other goods from mail bound for U.S. military stationed in Japan, authorities said. The 13 defendants, employees of cargo staffing company Aeroground, were arrested April 14 & 15 and appeared in federal court on charges of stealing & conspiring to steal U.S. mail, the U.S. Attorney's Office in San Francisco said. The 13 men, who range in age from 19 to 52, did not enter pleas during their brief court appearance, said a spokeswoman for the U.S. attorney's office. The defendants handled mail at the airport for an airline contracted by the U.S. military to deliver mail to Okinawa. Since Nov. 2003, soldiers based in Okinawa reported more than 570 incidents of not receiving mail or getting mail missing items such as laptop computers, digital cameras, DVD players & videogame consoles, according to the complaint. The winter holiday season saw the highest number of reported losses.
***"That's No Camel, That's My Luggage!" ........ as on April 6, a baggage handler wearing a camel suit taken from a passenger's luggage has left Qantas Airways red-faced, with Australia's national carrier investigating a potentially embarrassing security lapse. Passenger David Cox complained after he saw the baggage handler driven across the Sydney airport tarmac wearing the camel suit that had been packed into the baggage he just had checked in only minutes earlier. Cox, a marketing manager, had checked the camel suit and a crocodile costume onto Qantas flight 425 from Sydney to Melbourne in a large bag which had been marked to say it was carrying animal costumes. He said he was standing near his boarding gate and at first thought nothing when a child said "there's a guy with a moose head." But then he looked up and saw his camel costume. "I obviously was flabbergasted. My jaw dropped to the ground," Cox told authorities.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
***Off & Running ...... container shipping lines increased their total eastbound transpacific capacity 18% to about 299,900 TEUs a week in the yearto date to April 1, according to a report published April 8 by ComPairData, the global liner-shipping database. Thus the Pacific is already being challenged before peak season arrives. The April 1 World Liner Supply reports for the transpacific, Asia/Europe and transatlantic trades are posted online.
***A Revolution?....... as the all-water route between Asia & the U.S. East Coast via the Suez Canal could become a significant new alternative to the traditional Panama Canal all-water route and the congestion-prone Asia/California route if plans under consideration by ocean carriers materialize. Today, only two container services offer all-water connections between the Far East and the U.S. East Coast via the Suez Canal, despite calls by some shippers that such operations would be supported by the industry. Carriers believe nautical distances make the Suez Canal route competitive for shipments from South China & South East Asia to the United States, while the Panama Canal has an edge for cargo from more northerly ports in Asia.
***Mariner Deaths Triple ........ as the number of lives lost at sea worldwide last year trebled compared with 2003, official figures have revealed. There were 589 deaths, including ferry passengers, in 2004, against 197 in 2003, the Int'l Maritime Organization said. But the actual number of ships that were declared a total loss fell again last year to only 101, having peaked at 321 in 1991. The Int'l Salvage Union said the number of vessels needing salvage assistance rose from 218 in 2003 to 266 last year. A total of nearly 735,000 tons of oil, chemicals, bunker fuels & other pollutants were recovered last year, compared with nearly 606,000 tons in 2003. These figures do not include the vast number of deaths & losses not reported.
***Taking A Stand Against Pirates........ as Singapore, Japan, Laos and Cambodia have become the 1st Asian nations to sign a "Regional Co-operation Agreement on Combating Piracy and Armed Robbery" (ReCAAP) against ships in Asia. The government of Singapore said that ReCAAP is a Japanese initiative for anti-piracy co-operation amongst the Assn. of South East Asian Nations (Asean), China, Japan, the Republic of Korea, India, Sri Lanka and Bangladesh. A central feature of the ReCAAP agreement is the Information Sharing Centre (ISC), which will be an Int'l organisation located in Singapore run by an executive director & staff of 10-12 from member countries. The primary purpose of the ISC is to facilitate communication and information exchange between the member nations, as well as improve the quality of statistics & reports on piracy and armed robbery against ships in the region. The ReCAAP agreement requires the signatures of 10 Asian nations before it can be ratified. The center will be run by an executive director with a staff of 10 to 12 employees from ReCAAP member countries.
***The Mother of All Demurrage ....... as pick up your container from the terminal fast or you will face "sharply higher" storage charges, the Transpacific Stabilization Agreement (TSA) warns transpacific shippers. The warning was issued as many shippers are negotiating renewal of transpacific service contracts for the 2005-2006 season, which starts May 1. The transpacific carrier grouping said marine terminals & railroads are imposing "tough new penalties to keep equipment moving & boost throughput." "While carriers are mindful of customers' needs in isolated situations, it remains in all parties' long-term interests to eliminate cargo and equipment dwell time wherever possible, to relieve infrastructure congestion, assure equipment availability and control overall supply chain costs," said TSA. The carrier grouping cited numerous changes in pricing taken or considered by port operators on all U.S. coasts, and by railroads to cut the free time allowed for containers in their facilities and raise the demurrage charges for equipment left beyond the free time period. Californian ports are studying various options for reducing free time by a day, possibly calculating it from the time a specific container is discharged from the ship, not the time the entire ship has been discharged. This would cut free time for the 1st container discharged by up to 5 days, according to TSA. TSA noted that Burlington Northern Santa Fe (BNSF) will reduce its free-time allowance to the day of notification plus 24-48 hours for its major intermodal yards, with storage charges of US$100- US150 per day, effective May 1. Also on May 1, Union Pacific Railroad will raise its existing storage charges US$50 per day and introduce a third tier charge of US$300 per day for shipments stored more than 11 days; and CSX will increase its charge for shipments left more than 11 days to US$200 per day. Take your Customs Broker & trucker to lunch.
***Being Anti-Anti-Trust ...... as expected, the European Commission has renewed for another 5 years the regulation that grants antitrust immunity to liner shipping consortia serving European ports, while making minor adjustments to the previous regulation. "The European Commission has renewed until April 25, 2010 a block exemption allowing shipping companies to enter into consortium agreements covering the maritime transport of cargo to or from one or more EU ports," the EC said April 25. The exemption was 1st adopted in 1995 & renewed in 2000. Consortia are operational-type agreements between liner shipping companies, such as vessel sharing agreements, that do not involve cooperation on freight rates.
***Reporting Exemption ........ as the U.S. Federal Maritime Commission has clarified the market share thresholds used to determine if a carrier agreement benefits from an exemption from the statutory 45-day waiting period. Under a rule that became effective Jan. 3, the FMC ruled that certain joint agreements between ocean common carriers such as vessel-sharing agreements and slot-charter agreement will no longer be subject to the customary 45-day waiting period if they have a low market share. "To clarify the meaning of the exemption, as intended by the commission, section 535.311(a)(2) has been revised to state that the market share level of less than 35 percent applies if at least one party is not a member of another agreement in the same trade or sub-trade with any of the authorities listed in section 535.502(b)," the FMC said.
***Unmasked .....as in a major reversal of its commercial policy, CP Ships said it will end its multiple brand strategy and stop using historical names such as Lykes, Canada Maritime and ANZDL later this year. Instead, the Gatwick, U.K.-based shipping group will use a single brand: "CP Ships". Since 1993, CP Ships has acquired 9 container shipping companies, 7 of whose brands it still uses: ANZDL, Canada Maritime, Cast, Contship Containerlines, Italia Line, Lykes Lines and TMM Lines. The group had already eliminated the carrier names Ivaran and CCAL shortly after their takeovers. Retaining multiple brands helped CP Ships "maintain customer loyalty and build further on strong regional positions after each acquisition," the company said. Last year, Hamburg Sud also reduced the number of its carrier brands when it dropped the Columbus Lines & Crowley American Transport names to use the Hamburg Sud brand instead. The major groups Maersk Sealand/Safmarine/Portlink, Evergreen/Lloyd Triestino/Hatsu, CSAV/Norasia/Montemar/Libra, Zim/Gold Star/Niver Lines, CMA CGM/ANL/MacAndrews and Hanjin/Senator are the major remaining proponents of the multiple-brand policy in liner shipping. And you thought those companies still existed.
***Keeping Us Alive ....... as the U.S. House Homeland Security Committee voted last week for a budget bill that would authorize US$34Bn for the Dept. of Homeland Security, an increase from the US$27.3Bn requested by the Bush administration.The bill would include US$134M for the Container Security Initiative, down slightly from the Bush administration's request of US$138M, and sets requirements for the Customs & Border Protection program for conducting targeted inspections at overseas ports. The bill requires CBP to conduct a risk assessment of container vulnerability in each foreign port being considered for the program and that the DHS secretary will only implement the program at those ports deemed to pose a "significant" risk. The bill also requires the department to help foreign customs authorities set up non-intrusive inspection systems at CSI ports & train personnel. Cargo containers arriving at a United States port of entry from a CSI port would require the same level of inspection & screening as cargo containers arriving at a U.S. port of entry from a foreign seaport that is not participating in CSI unless the containers were initially inspected at the CSI port at the request of CSI personnel and such personnel verify & electronically record that the inspection indicates that the containers do not contain unlawful goods or persons. An amendment introduced for the 3rd consecutive year by Rep. Edward Markey to require 100% inspection of all cargo placed aboard passenger aircraft was defeated by a vote of 8-20.
***Planting The Flag? ....... as Taiwan's Evergreen Group has been given permission by Beijing authorities to organize a subsidiary in mainland China, according to the Taiwan Economic News. The report, which quoted company sources, said the shipping company has become the 1st Taiwanese firm to acquire a permit, which will help the group to save US$2.22Bn annually in service commissions. According to the report, the group acquired the permit through its Italy-based container-shipping subsidiary Lloyd Triestino (LT), and it will allow Evergreen to integrate air, land & marine logistics operations on the mainland.
***Hamburg-based Peter D÷hle Group Buys ..........as it has acquired 100% ownership of Isle of Man-based Swan Container Line for an undisclosed amount. Swan Container Line was established in 2003 by equal share partners Eurogate Int'l, D÷hle Group, FESCO and NC Services Ltd., when it started a weekly liner service between Hamburg and Bremerhaven in Germany & St. Petersburg, Russia.
***U.S. Coast Guard Takes Closer Look ...... as it is in the early stages of defining new requirements for expanding coverage of the Automated Identification System to smaller vessels as part of the service's continuing effort to get a handle on what types of vessels are operating in coastal waters and whether they pose any threat to maritime commerce. The Coast Guard intends to expand the types of vessels required to carry the AIS system to include those under 65-feet in length and also require them to provide advance notice of arrival.
***Hot Zone Cities ....... as the Port of Busan is installing a web-based system that will allow chips to be installed in containers so that interested parties can track the whereabouts of their shipments, the Financial Times reported. The tracking capability is being provided by South Korea's largest telecom company, KT, which is spending US$1Bn to wire the entire city of Busan. Besides Busan, Singapore ports have been fitted with similar chips as have some European port destinations.
***Preventing Truly Hot Containers ........ as the Port of Oakland and the US Customs & Border Protection (CBP) recently commenced a new security system installed in the port's seven Int'l terminals to screen all container traffic for sources of radiation. Oakland has become the 1st port in the U.S. where the Radiation Portal Monitors (RPMs), built at a cost of US$4M, have been installed & operable. Oakland is the 4th largest containerport in the country, moving some US$30Bn worth of goods annually. We need 100 more ports with this.
***Following The Freight ....... as Savi Technology, an Radio Frequency Identification (RFID) manufacturer, & Hutchison Port Holdings (HPH), have set up a new "smart container" company to build & operate an active RFID-based information network to track & manage containerized ocean cargo, a joint statement announced. The joint-venture partners have put in US$50M in the company. Savi Networks will build the network by installing RFID equipment & software in participating ports around the world to provide users with information on the identity, location & status of their ocean cargo containers as they pass through such ports.
***Wallenius Wilhelmsen Lines' New Ride ........ as it will acquire a 50% share of Distribution & Auto Service Inc. (DAS) from Nissan North America Inc. for an undisclosed amount on April 30. The remaining 50% share will be bought by Manuel Antelo, president of Car One Argentina, and a member of the board of directors of Renault Argentina.
***Green Costs ...... as Long Beach Board of Harbor Commissioners' Maritime Services Committee has given the preliminary approval for a general tariff rate increase of 5% starting July 1, in order to cope with costly infrastructure, environmental and security projects. During the next 5 years, the Port of Long Beach has plans for more than US$1Bn in infrastructure improvements including environmental protection programs, & tens of millions of dollars more for tighter security.
***Time's Up For Single Hull ....... as a revised schedule for the phasing out of single hull oil tankers and a new regulation banning the carriage of heavy grade oil in single hull oil tankers enter into force on 5 April 2005. The measures were adopted in Dec. 2003 as amendments to Annex I of the MARPOL Convention, following the Nov. 2002 sinking of the oil tanker Prestige off the Spanish coast. It specifies that tankers of single hull construction should be phased out or converted to a "double hull" according to a schedule based on their year of delivery, starting this year.
***Oily Sentence Shows We CARE ...... as a U.S. federal judge April 28 sentenced the CEO of an Iowa shipping company to 33 months in prison for directing the illegal dumping of 442 tons of fuel-contaminated wheat from a freighter into the South China Sea. U.S. District Judge Alan Gold also ordered Rick Dean Stickle to pay US$60,000 in fines for dumping the oily grain in 1999. Stickle, chairman & CEO at Sabine Transportation Co. of Cedar Rapids, Iowa, was permitted to remain free on bond pending an expected appeal. The wheat, intended for distribution by humanitarian group CARE in Bangladesh, was contaminated by diesel fuel leaking into one of the freighter Juneau's main cargo holds. The company asked for permission to dump the grain at sea but was told that doing so violated U.S. law. Prosecutors said Stickle tried to conceal the crime & obstruct investigators. His company & 4 other employees pleaded guilty previously in the case, with the company agreeing to pay US$2M in fines.
***The FMC Revoked 16 OTI Licenses ........ as for failure to maintain valid bonds on April 8, the companies concerned are: AA Shipping, Houston; American Steamship Agency Corp., Cresskell, N.J.; Bluesea Shipping Line, Carson, Calif.; Bral Marine Service, Miami; Cargo Express Northwest, Redmond, Ore.; Concordia Shipping Line, Miami; FYT, City of Industry, Calif.; GAC Int'l Transport, Linden, N.J.; Malvazia Co., Savannah, Ga.; Medtrans, Mundelein, Ill.; Navigation Dynamic Services, Carson, Calif.; Oceanair Freight International, Opalocka, Fla.; Overseas Int'l Corp., Holbrook, Mass.; Reliable Logistics, Jamaica, N.Y.; Simmons Int'l Express, Prospect Heights, Ill.; and Summit Cargo Group, Inglewood, Calif.
The FMC revoked 8 additional OTI licenses on April 24. The companies concerned are: AAA Int'l Freight Forwarding Group Inc., Miami; Boston Worldwide Inc., Chelsea, Mass.; Danmax Int'l Corp., Miami; American Consultative Logistics, Franklin Square, N.Y.; Honor Truck & Transfer Inc., Long Beach, Calif.; J.H. Bachmann Inc., Jersey City, N.J.; P.Y. Logistics Inc., Gardena, Calif.; and Southern Shipping Co., Savannah, Ga.
***Up The Creek ....... as the two Norwegians thought they had the perfect escape vehicle for their heist &emdash; a rowboat. They overlooked one thing: neither knew how to row a boat. Police said April 21, the men had broken into an ambulance boat near the small western town of Askvoll, and likely were looking for drugs or cash. The boat's burglar alarm alerted the ambulance crew members, who quickly arrived and saw the two men trying to flee in the small rowboat just before midnight. Their paddling attempts were hopeless, police said. "They didn't have much of a chance," Deputy Sheriff Arnt Johnny Langeland said on the state radio network NRK. "They were rowing in opposite directions." The ambulance boat then gave chase, turning its powerful spotlights on the pair rowing in tiny circles. A local ferry joined the slow-speed pursuit, beaming its spotlights on the rowboat as well. The two men managed to get their rowboat to land, where they immediately were taken into police custody. They would likely face charges of breaking and entering, as well as theft -- but not known if the 2 had managed to steal anything.
***Sister Ports Compete ........ as the Port of Long Beach reported that preliminary estimates indicate it handled a total of 466,019 TEU in March, an increase of 3.9% over the same month the previous year. Meanwhile, the nearby Port of Los Angeles saw its throughput drop 14% to 525,019 TEU last month compared to March 2004; however, it handled more containers than Long Beach did last month.
***This Month In U.S. Navy History .......
1778 - Capt. John Paul Jones of USS Ranger leads a landing party raid on Whitehaven, England.
1814 - USS Peacock captures HMS Epervier.
1861 - President Lincoln extended blockade of Confederacy to Virginia and North Carolina ports.
1861 - USS Saratoga captures the slaver Nightingale.
1862 - Naval forces capture Forts Jackson and St. Philip, La.
1865 - Body of John Wilkes Booth brought to Washington Navy Yard.
1914 - First combat observation mission by Navy plane, at Veracruz, Mexico
1944 - U.S. Tank Landing Ships (LSTs) attacked during Operation Tiger.
1944 - Fast carrier task force (12 carriers) commence two-day bombing of Truk.
1952 - USS Hobson (DMS 26) sinks after colliding with USS Wasp (CV 18); 176 lives lost.
1955 - USS Albany (CG 10) & USS William Wood (DD 715) begin to provide disaster relief to citizens of Volos, Greece.
1965 - Dominican Republic intervention began.
1993 - Secretary of Defense memo orders Armed Forces to train & assign women on combat aircraft and most combat ships, but not to ground combat positions.
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 feature for April 2005: "The Boeing Tr-Motor"
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..............
Big Vendors Muscle Into RFID
Charting The Supply Chain Frontier
C-TPAT's New Look
Digital Video Surveillance Today ......more than a security.
Food Marketing Logistics
Highway Watch Training In Your Area ........details & dates.
IATA First Quarter World Stats
Intermodal Transportation Act of 2005 (proposed)........ would authorize federal grants to intermodal transportation facilities.
Int'l Tax Laws by Country --
RFID Knowledgebase ...... hundreds of case studies in multiple industries.
U.S. Congressional Research Service ........... biometric identification, maritime domain awareness, smart containers, and other developing programs
U.S. Navy Special Ops To Expand
U.S. Private Sector Pushes China's Leadership in WTO Services Negotiations
U.S. Transportation Dept. & Nuclear Regulatory Commission ........ jointly seeking your comments on proposed changes to the Int'l Atomic Energy Agency Regulations for the Safe Transport of Radioactive Material.
Who Are The Fortune 100?
European Road Freight Transport 2005
Material Handling Product News
zNose Handheld Remote .......... sampler to monitor & protect their cargo container shipments-- can rapidly detect everything from bombs to chemical threats.
World Trade Organization Events
3rd Eyefortransport 3PL Summit ..... June 27-29, Intercontinental Hotel, Atlanta
14th Annual Int'l Air Cargo Conference & Exhibit- Houston 2005........17 to 19 May 2005 (National Transportation Week). At IACC- Houston 2005.
23rd Annual D/C EXPO May 17-19 at Navy Pier, Chicago.
Bear Stearns 14th Annual Global Credit Conference ......... New York at 2:45 p.m. Eastern time on Wednesday, May 18, 2005.
Los Angeles Harbor Transportation Club Golf Tournament ......... Friday, May 27, 2005, California Country Club
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
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."
Abraham Lincoln Presidential Library & Museum ...... just opened.
Hawaii Undersea Research Laboratory
Int'l Space Station Expedition 11
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _____
Hedges Vs. United States
3rd U.S. Circuit Court of Appeals
April 15, 2005 No. 03-4395
Doctrine of Equitable Tolling: The U.S. Court of Appeals for the 3rd Circuit ruled that the principle of equitable tolling applies to actions brought under the Suits in Admiralty Act, but that the principle was unavailing for this plaintiff. In the instant case, plaintiff's boat was damaged when the federal mooring buoy to which it was tied off in a storm broke loose, with the result that his boat was damaged. Plaintiff contacted several National Park Service and Dept. of the Interior employees, who advised him to file a claim under the Federal Tort Claims Act (FTCA). His claim was denied under both the FTCA and the Suits in Admiralty Act (SAA). He brought suit under the FTCA and later amended his complaint to allege negligence under the SAA. The court 1st found that, despite the wording of the SAA, the principle of equitable tolling might allow an action to be brought more than 2 years after the damage was incurred. In this case, though, the court determined that the federal government did nothing to deter or prevent the plaintiff from filing suit within the period of the statute of limitations.
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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