Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
31 March 2006
Good Friday 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 2006.
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 _____________
***Our Cargo Law Website ........ as for Feb. 2006 we received a record 3,845,675 hits to the Cargo Law Website -- but now we have a record of 4,378,396 hits at a maximum of 196,154 hits per day. The reasons for our dramatic boost in industry popularity are numerous and include the dedication of our staff in bringing you a non-commercial Website without ads -- but with features you can use each day. Here are 2 great examples:
THE FUN of over 68 online transportation-related games which our Libby Thompson has brought to the reorganized "TRANS-GAMES" feature...
THE DRAMA of a real time disaster in our coverage of M/V Hyundai Fortune -- afire in the Gulf of Aden with hundreds of containers blown overside. There has been a multinational struggle to save the vessel -- with your cargo on board. We bring you expert on-scene commentary which is unavailable from any other news source. Now we are the first news organization to lead a controversy over the cause of this major loss. Please use this information to educate the shipping public to acquire high quality marine cargo insurance -- or the real disaster could be theirs. Our features have a very serious side.
***Down On The Border, In Kansas City ........ as a corruption investigation into the Mexican president's stepsons could slow plans to open a high-tech customs facility that would clear trucks for export to Mexico in the heart of the Midwest. The Mexican customs facility, which U.S. & Mexican officials are planning to open in Kansas City in May, would be the first customs house run by a foreign country inside the United States. Customs agents from both countries would work to inspect and seal big rigs full of export goods, and shoot the trucks back out onto the North American Free Trade Agreement corridor, where up to 600 trucks could roll daily through the border without delay. But in the wake of a corruption probe involving the sons of Mexico's first lady, a Mexican congressional commission is now considering requesting a formal briefing on the Kansas City project and the national customs system. A separate congressional investigation, launched last year, is examining whether the first lady's sons were involved in importing contraband goods from China. Trade analysts say the proposed inquiry, sponsored by opponents to Mexican President Vicente Fox, better reflects election-year politics than real concerns over trade between the neighboring nations. Mexico holds presidential elections July 2. The US$3.1M facility is designed to attract business away from Long Beach, Calif., & New Orleans, where bottlenecks are causing companies to explore shipping freight through Mexico rather than through ports. Once the agreement is completed, Kansas City would essentially function like a Mexican port. By 2015, customs agents could process as many as 600 trucks per day, packed full of cars and electronics from across the country.
***Record Imbalance ....... as the U.S. trade deficit grew in Jan. to a record US$68.5Bn, as record imports led by high oil prices outstripped record exports reports the U,S, Commerce Dept. The monthly trade gap was 5.3% higher from a revised US$65.1Bn in Dec., Commerce said. The US$68.5Bn level surpassed economists' forecasts of US$66.5Bn. The deficit's growth was led by high oil prices, which grew by more than 4%.
***Thread of The Problem ....... as the possibility that textile negotiations might occur separately from those involving other products as part of the World Trade Organization's Doha Development Agenda round of multinational trade talks has pitted importers of textiles & apparel against U.S. manufacturers. The leaders of 6 trade associations representing importers wrote a letter to World Trade Organization (WTO) ambassadors expressing "our great concern regarding reports that your governments may be considering support for a restrictive textile and apparel sectoral initiative." Taking textile & apparel goods out of "the negotiations on non-agricultural market access (NAMA) is contrary to the interests of producers in your countries, because it will undermine their potential for growth and threatens to resurrect the special protection for this sector that was only eliminated a year ago," the association leaders said.
***Sources of Transport Economic Crime ........ as in the past 2 years at least 45% of transportation & logistics companies have been victims of economic crime over the last 2 years, according to a new global economic crime survey by PricewaterhouseCoopers. The survey identified the following "common fraud schemes" that "impact the transportation & logistics sector";
* Financial statement manipulation.
* Misappropriation of assets.
* Unauthorized receipts or expenditures.
Other schemes include aiding and abetting actual cargo theft, fraud by senior management, and disclosure fraud after inquiries from government and law enforcement entities. Read the prevention tips.
***Running The Corn Blockade ......... as the Bush administration has asked for World Trade Organization consultations with Canada over its provisional antidumping & countervailing duties on U.S. grain corn. Canada imposed provisional duties on imports of U.S. grain corn in mid-December in the amount of US$1.65 per bushel. According to the Office of the U.S. Trade Representative, imports of U.S. grain corn into Canada have fallen 42 % in the last 2 years.
***Concrete Issues ........ as the Bush administration officially entered an agreement with Mexico to increase imports of gray portland cement, ending a 16-year trade dispute. The agreement settles all litigation regarding outstanding claims for duties before U.S. & Int'l courts, and divides between the parties the deposits of estimated antidumping duties. The agreement also sets a limit of 3 million metric tons on imports of Mexican cement to enter the U.S. at an antidumping duty rate of US$3 per metric ton. If a disaster occurs, it allows the president to seek an additional 200,000 metric tons at the same duty rate. If the terms of the agreement are adhered to over the next 3 years, the agreement will end and the antidumping order revoked. This resolution should ease U.S. shortages, espcially in the wake of Hurricanes Katrina & Rita.
***Buenos Aires Brakes Beef ........ as the Argentine government will suspend beef exports for 6 months in an effort to beat back inflation. The Washington Post reports that Argentina hopes to raise meat supplies to keep prices down for domestic consumers. Argentina is the world's 5th largest beef producer, with traditionally high volumes of exports to the European Union & Russia.
***Factory Floor To Retail Store ........ as UPS has completed the rollout of UPS Trade Direct Air & Ocean services to facilitate export shipments from the United States and Canada to Europe. UPS Trade Direct services streamline the supply chain by making it easy to move goods through customs that are destined for multiple locations but transported in one shipment. Trade Direct eliminates the need for client distribution centers in the receiving country for breaking apart freight shipments, minimizing handling and carrying costs. This latest expansion follows the successful implementation of the service in 2004 along other major routes. UPS launched Trade Direct services outbound from Europe to the U.S. in Jan. 2005 as well as inbound from Asia to Europe in June 2005. A ground cross-border service also is available between the U.S., Canada and Mexico. North America and Europe stand at the nexus of global trade. In 2004 alone, the U.S. & the EU exchanged US$441.5Bn in goods(a), while Canada's two-way trade with the EU exchanged US$62.9Bn. With Trade Direct, UPS customers in the U.S. and Canada now will be able to ship goods faster and more efficiently to Europe. The service offers a single point of contact, one shipping invoice and extraordinary supply chain visibility through UPS Flex(R) Global View technology, which provides tracking information at critical shipment milestones throughout the process. Using Trade Direct, goods bound for Europe are individually packaged, labelled for delivery and then combined into one freight shipment. After moving by plane or ship, the goods clear customs as a consolidated unit. That unit is then separated back into individual parcels or less than truckload (LTL) shipments, bypassing costly warehouse stops, and placed directly into the UPS small package system or into an LTL trucking line for final delivery. An innovative idea!
***Deutsche Post World Net Spins Marken ....... as it has agreed to sell courier company Marken to the private equity & venture capital company 3i for an undisclosed amount. London-based Marken, which specializes in special deliveries for the pharmaceutical, technology & media industries, was acquired by Deutsche Post as part of the German company's takeover of Exel in Dec.
***NYK Consolidates ....... as on April 1 it will merge its & British logistics subsidiaries, NYK Logistics (UK) Consumer & Retail Ltd. and NYK Logistics (UK) Manufacturing & Retail Ltd. under the new name of NYK Logistics (UK) Ltd. The newly consolidated company will become NYK's largest overseas logistics subsidiary with annual sales of about £300 million ($520 million) and a staff of 4,500.
***UTi Worldwide Goes To Market ......... as the Calif. based global logistics provider has acquired Market Industries, Ltd., a privately held provider of 3rd-party logistics services and multi-modal transportation capacity solutions specializing in truck brokerage, for US$197M. Market Industries has about 600 employees, along with independent contractor associates and about 175 independent affiliates and agent offices.
***Kuehne + Nagel Goes To Estonia ....... as it has taken over Estonian forwarding company E.M. Trans AS and its subsidiaries for an undisclosed amount. E.M. Trans is located in Tallinnis and posted revenue of US$12.2M in 2004. The company has about 40 employees, with subsidiaries in Lithuania, Latvia & Finland.
***APX Logistics Goes Bankrupt ........ as the U.S. Postal Service will take over the undelivered packages of bankrupt consolidator APX Logistics. Santa Fe Springs, Calif.-based APX, which filed for protection under Chapter 11, was the largest provider of package delivery services to businesses for USPS. APX employs more than 1,850 people with 47 facilities nationwide and more than 400 owned trucks. The company said it processes more than 250 million packages per year for USPS.
***Software Consolidation ......... as Denver-based supply chain management software firm Cadre Technologies has acquired Lenexa, Kan.-based LDS Corp., resulting in a combined company that is one of the largest software providers to the 3rd-party logistics industry, with more than 200 customers in North America.
***New Spending To Widen Rail Bandwidth ........as the American Assn. of Railroads (AAR) says that United States Class I freight railroads will spend more than US$8Bn this year for laying new track, buying new equipment, and making infrastructure improvements. The rise in railroad industry's capital expenditures budget represents a 21% bump from 2005, according to the AAR. This expected increase is based on numbers provided to the AAR from each Class I railroad. Part of the reason for the rise in spending can be attributed to the need to increase railroad capacity. Improved service, in turn, results in fewer choke points for shippers. Subsequently, service reliability is improved&emdash;a critical shipping issue.
***Safer Rails ........ as 2005 was the safest year on record for the highway grade crossing accident rate, according to data released by the Federal Railroad Administration. The employee injury rate fell by 12.7%, while the number of employee injuries declined by 9%, breaking records set in 2004. The grade crossing incident rate dropped 4.2% from 2004, when the previous record were set. The number of grade crossing accidents (down 1.9%) and the number of fatalities (down 3.5%) were both the 2nd lowest on record. Progress was also made in reducing train accidents, with the total number down almost 8% from 2004, and the rate down more than 10%, according to the American Assn. of Railroads.
***Neptune Orient Lines To Sail Indian Rails ........ as the Singapore-based owners of APL have been granted an approval "in principle" from the government of India to operate freight rail services in the booming South Asian country. In Feb., the Indian Parliament approved a proposal to privatize the country's rail freight services, which have been controlled by a government-owned monopoly, CONCOR. The approval was granted to NOL's joint venture company India Infrastructure and Logistics Pvt Ltd. (IIL), and will permit the company to run unlimited trains on all India routes, for an initial period of 20 years, which is extendable by another 10 years. The APL subsidiary pioneered double-stack trains in the U.S. in 1984. Although the U.S. investment was sold in 1999.
***Vancouver Non-Profit Rails ........ as RailAmerica Inc. has sold the 181-mile E&N Railway in Vancouver Island, British Columbia, to the non-profit organization Island Corridor Foundation for about US$1.15M. RailAmerica is a holding company for over 40 short-line railroads with roughly 8,000 track miles in the U.S. & Canada.
***Safety Stats Back Soon ........ as the Federal Motor Carrier Safety Administration is preparing to resume posting fleet safety ratings compiled for its SafeStat program, two years after criticism by the Transportation Department's inspector general caused the agency to remove the rankings from its Web site.
***Debate is Hourly ....... as in the continuing struggle over the federal hours-of-service rules, a driver trade association has dragged the new rules back to court -- again. After failing to persuade the Federal Motor Carrier Safety Administration (FMCSA) to revise the new rules, the Owner-Operator Independent Drivers Assn. (OOIDA) filed a petition in January with the U.S. Court of Appeals for the D.C. Circuit. In the petition OOIDA asked the court to "review" the latest hours-of-service rules, which took effect Oct. 1, 2005. The court is the same one that struck down the FMCSA's previous hours-of-service rules in July 2004, calling the rules "arbitrary & capricious" and arguing that FMCSA did not consider the effects of the rules on drivers' health. In response, FMCSA produced reams of scientific research to back up the latest rules, issued Aug. 25, 2005. Other groups have expressed interest in joining the lawsuit or filing their own, including Public Citizen & the California Trucking Assn. Public Citizen was among several safety groups that first brought the FMCSA to court over the hours-of-service rules in 2003. OOIDA previously petitioned FMCSA to reconsider 2 aspects of the final rule:
* Allow solo drivers to extend the 14-hour on-duty limit using a break of less than eight hours. Currently, the only way a driver using the sleeper-berth option can extend the 14-hour limit is to spend at least eight consecutive hours in a sleeper berth, whereas previous rules allowed a break of just two hours to extend the day
* Allow team drivers to operate under the previous sleeper-berth rules, allowing them to take sleeper periods of less than eight hours to extend the 14-hour limit.
***Sign of LTL To Come? ....... as less-than-truckload carrier Old Dominion Freight Line will increase its base rates approximately 4.5%, starting April 17.
***Restless Truckers........ as the American Trucking Assn. said the turnover rate for large truckload carriers increased 1% point to 136% in the 4th quarter compared with the previous quarter, tying a record high set in the 4th quarter of 2004. ATA said in a statement the full-year turnover rate for large truckload carriers averaged 130%, breaking the record average rate of 121% set in 2004.
***FMCSA Study Discovers Gravity ......as it finds that drivers of large trucks & other vehicles involved in truck crashes are 10 times more likely to be the cause of the crash than other factors, such as weather, road conditions, and vehicle performance according to a new study released by the Federal Motor Carrier Safety Administration. I think we could have mailed this one in and saved the report expense. Next month FMCSA will explain why many long haul trucks appear to be wetted after periods of rain.
***U.S. DOT May Fund Your Idea! ........ as the Small Business Innovative Research (SBIR) program provides small businesses with funding to develop commercially viable technologies to answer federal research & development requirements. Proposals from U.S.-owned businesses of no more than 500 employees are due on May 2, 2006 with awards to be made in October. Learn more.
***Rubbing The Stiff Trucker ....... as the Malaysian government is only too happy to help truckers & travelers on those long hauls. The country's 1st highway drive-in massage parlor opened this month, with the aim of reducing accidents by easing tense muscles of stressed-out drivers. The parlors will be equipped with automatic massage chairs on the North-South Highway, the country's main highway which stretches the length of Peninsular Malaysia. Hundreds of thousands of Malaysians commute along a web of highways daily, but accidents typically rise during festive occasions when millions leave Kuala Lumpur & major cities during extended holidays.
***Transporting Two Stiffs ......... as a drunken hearse driver was arrested in the western German town of Krefeld after biting a police officer taking him in for an alcohol test on March 6. "The hearse driver nearly fell over when he got out of the car. Then he had to hold onto everything he could find as he stumbled to the house," said a police spokesman. Police had called for a hearse at a funeral home to transport a body to the cemetery. Police decided to take the man to the station to test his blood alcohol level, but when they tried to get him out of their car he started a fight and bit an officer several times in the hand.
2. The Cargo Letter Financial Page _____
**APL. DOWN as average revenue per FEU in the same period also declined 2% to $2,745 from $2,802, during the 6 week period ended Feb. 10
**Cathay Pacific Airways reported a profit of US$425M 2005, DOWN 25% from 2004.
**COSCO Pacific Ltd.(terminals &logistics services). UP with a 62% jump in net profit in 2005 to US$334.9M from US$206.6M in 2004.
**Delta Airlines. DOWN with a net loss of US$300M for Jan. in its monthly operating report to the U.S. Bankruptcy Court for the Southern District of New York.
**Deutsche Lufthansa AG (parent of Lufthansa, Lufthansa Cargo and now Swiss Int'l Airlines) UP with net profit of US$542M in 2005, up 12.1% from 2004.
**EGL Inc UP with net income of US$58.2M in 2005, an increase of 14% compared to US$50.9M in 2004.
**FedEx Corp. UP with net income of US$428M for its fiscal 3rd quarter ended Feb. 28, up 35% compared to US$317M a year ago.
**Hapag-Lloyd and CP Ships (which TUI acquired for US$2.3Bn in Oct.) DOWN with net earnings of US$336Min 2005, down 0.4% from 2004.
**Hutchison Port Holdings. UP with US$1.3Bn in earnings before interest & tax in 2005, up 14%.
**Kitty Hawk. DOWN with a US$4.1M 4th-quarter net loss.
**Orient Overseas Container Line. DOWN with net profit of US$651.3M for 2005, down 2.9% from US$670.6M in 2004.
**Providence and Worcester Railroad Company. UP as net income for 2005 increased to US$1.3M from US$1.0M in 2004.
**Trailerbridge. UP with net income attributable to common shareholders up 118.9% to record US$2.8M for Q4 2005.
***Interpool, Inc. Steps Forward ....... as it has announced that its wholly-owned subsidiary, Interpool Containers Ltd (ICL), has entered into an agreement to sell a substantial majority of its operating lease portfolio of standard dry marine cargo containers to a newly formed subsidiary of an investor group based in Switzerland. Following the sale, Interpool and its 50%-owned subsidiary, Container Applications Int'l, Inc., will perform management services on behalf of the purchaser for the containers being sold, and Interpool will continue its active businesses of leasing cargo containers and container chassis to shipping lines and other customers. Interpool's container sale involves a total of approximately 273,000 standard dry marine cargo containers owned by ICL, as well as an assignment of all of ICL's rights under existing leases for this equipment. The purchase price is approximately US$515M. Interpool, Inc. will pay a cash dividend of $.08 cents per share for the first quarter of 2006. The dividend will be payable on April 17, 2006 to shareholders of record on April 3, 2006. The aggregate amount of the dividend is expected to be approximately US$2,280,000. The amount of the quarterly dividend is based on an indicated annualized dividend rate of 32 cents per share. Interpool is corporate sponsor of The Cargo Letter archive.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ______
***Air Volumes Continue Up ........ as air cargo shipments worldwide increased 3% in 2005 to 78.7 million metric tons, according to Airports Council Int'l (ACI). North America volumes were flat last year at 29.9 million tons, while volumes in Europe rose 3% to 15.5 million tons. Volumes increased 1% in Latin America & the Caribbean to 36 million tons. Middle East volumes increased 8% to 3.3 million tons, and Asia-Pacific cargo improved 5% to 25 million tons. Africa volumes were flat at 1.3 million tons. Memphis remained the top cargo airport worldwide in 2005, due to FedEx, as its air-freight volume increased 1.2% to 3.6 million tons. Following Memphis was Hong Kong with 3.4 million tons, up 10%; and Tokyo Narita, 2.3 million tons, down 3.5%. Los Angeles, the 2nd-highest U.S. airport was in 6th place with 1.9 million tons, up 1.4%.
***Keep Your Cargo Off The 92? ........ as the European Commission has drawn up a blacklist of "unsafe" airlines, banning them from flying passengers or cargo in the European Union or to operate within European airspace. There are 92 airlines on the list, most of them from Africa, that are banned from landing at European airports. All carriers from Congo, Equatorial Guinea, Sierra Leone, Swaziland and Liberia are included in the ban because those countries were determined to have poor regulatory systems for overseeing safety. Congo alone has 50 carriers that are subject to the ban. The list of airlines banned or subject to operational restrictions was created with the help of the Aviation Safety Committee following a series of fatal crashes in Europe the past two years.
***Lufthansa Takes The Stand ........ as the German airline has offered to cooperate with U.S. prosecutors who are investigating alleged price-fixing in the air cargo industry. The offer could give Lufthansa immunity from criminal charges if it testifies against other carriers. More than a dozen private antitrust suits have been filed in the U.S. since a series of raids Feb. 14 by federal agents on the offices of major airlines. A federal grand jury in Washington, D.C., has begun to hear evidence, an indication that the U.S. Justice Dept. may seek criminal charges against some airlines and their executives. One of the civil suits, filed by Niagara Frontier Distribution Inc., an air-freight shipper in Lockport, N.Y., alleges that Niagara Frontier was overcharged by 9 airlines. Niagara Frontier alleges that surcharges have risen and by the same amounts, no matter which airline is used -- and that the fuel surcharges persist even when fuel prices fall back. The suit also names the Int'l Air Transport Association (IATA) as a defendant. IATA has denied any involvement in setting air cargo fuel surcharges.
***Boeing Looks West ....... as it has forecast that Asia-Pacific airlines would provide the largest market outside North America for new airplanes over the next 20 years. Worldwide, Boeing anticipates airlines investing US$2.1 trillion for 25,700 aircraft in 2 decades, with Asia-Pacific operators purchasing 7,200 new airplanes worth US$770Bn, nearly tripling the region's fleet to about 8,600 airplanes by 2026.
***Passing The "Flight" Test ....... as Airbus successfully evacuated 853 people acting as passengers from its super-jumbo A-380, the biggest passenger plane ever built. The March 26, test was a critical milestone in the process of certifying the plane as safe to begin commercial service. Airbus declared it a "great success" even though one man broke a leg & 32 others suffered minor injuries sliding down evacuation chutes. The test was conducted in a darkened hangar at an Airbus test facility in Hamburg, Germany. Eighteen flight attendants from Lufthansa, an airline which has ordered the A-380, managed the evacuation. The evacuation test was the 1st ever tried with the A-380 and involved the most passengers ever in such a test.
***UPS Upgrades The Fleet ....... as it plans to retrofit most of its aircraft with a computerized display system designed to improve safety and fuel economy. The retrofit project will begin with 107 of UPS' Boeing 757 & 767 aircraft being equipped with Boeing's Class III Display Device. Eight new Boeing 747-400 aircraft recently ordered by UPS will feature the system. "This system will support software programs that make available in the cockpit information that today exists only on paper or in the hands of air traffic controllers," said Bob Lekites, UPS' VP, airline & Int'l operations. Ultimately, it will help pilots with navigation and allow them to space their aircraft on their own; call up the most complete and accurate long-range weather maps; warn of potential collisions on the ground; push the maintenance logbook into the digital age, and place the entire flight manual within easy electronic recall," Lekites added.
***Malaysia Airlines Adds The 400 ...... as its cargo operation MASkargo has received its 1st ever 747-400 freighter from Boeing. The airplane is the 1st of two 747-400Fs that the airline will receive this year. The 747-400F can carry 124 tons of cargo up to 8,240 kilometers.
***United Airlines Implements China Rights ....... as it has signed a code-share agreement with Shanghai Airlines taking advantage of 2004's bilateral aviation agreement between the U.S. & China. United routes listed under the agreement include Shanghai to Chicago & San Francisco; San Francisco to Los Angeles, Newark & New York (John F. Kennedy Int'l Airport); and Chicago to Newark and New York (LaGuardia Int'l Airport). Shanghai Airlines flights included in the agreement depart from Pudong Int'l Airport in Shanghai to Shenyang, Chengdu, Dalian & Qingdao.
***American Airlines Implements China Rights ....... as it will start its first ever service to China on April 2 with daily nonstop service between Chicago's O'Hare Int'l Airport and Shanghai. The service will use Boeing 777-200 planes. American was granted entry into the U.S./China market last February by the U.S. Transportation Department, following the bilateral aviation agreement signed between the countries in 2004. The flight will introduce American's new "flight specific" cargo product.
***Help Wanted At TNT Airways ......... as it will hire 80 more pilots this year to fly new aircraft scheduled to enter service in the next year. The in-house airline for TNT Express added 20 pilots in Jan. TNT will take possession of two BAe 146s, two Boeing 747-400 and 5 Boeing 737s by May 2007. TNT's current fleet consists of 11 BAe 146s, six 737s & 4 Airbus A300 aircraft. TNT has delisted from the London Stock Exchange . TNT shares will remain listed at Euronext Amsterdam and the New York Stock Exchange.
***Cargo 2000 + 1 ........... as United Arab Emirates-based Etihad Airways' freight unit Etihad Crystal Cargo has joined Cargo 2000. Cargo 2000 is an IATA coalition of nearly 50 air freight & logistics firms whose goal is to reduce the number of processes in the shipper-to-consignee chain. Look at the process.
***OAG Wants Your Cargo ......... as the provider of flight schedules & transport related information for the cargo community, has established a General Sales Agent (GSA) Network in North America that will focus on selling OAG's suite of cargo products. The agents will service the North American freight forwarder & airline cargo communities, by offering Inforwarding.com.
***DHL Americas Wants It Easy ....... as it has developed a new software package for small & medium sized shippers. The software, known as EasyShip Professional, allows users to see a variety of shipping costs & transit times, depending on the scenario selected. Shippers can install the software without an Internet connection and the offline system will allow customers to retrieve address & client information. In addition, shippers can configure the software to send automatic e-mail notifications to customers once a package is shipped & track packages in real time.
***Flying Postal ....... as the U.S. Dept. of Labor (DOL) has announced an agreement with the U.S. Postal Service (USPS) that will result in payment of more than US$6.5M in back wages to almost 900 pilots, co-pilots, & flight engineers. The employees worked on several USPS contracts and subcontracts to transport mail by air between Jan. 1996 & Aug. 2001. Wages paid were subject to requirements of the Service Contract Act. The USPS and other parties, such as contractors and the U.S. Air Force, challenged before the Labor Department's Administrative Review Board a change in the method used by the Wage & Hour Division to determine new, higher prevailing wage rates for flight crew employees. USPS did not incorporate the higher rates for pilots, co-pilots, & flight engineers into their contracts and brought the matter to the Review Board. The Board vacated Wage & Hour's method of computing the new rates & remanded the matter for issuance of a new wage determination.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs ____________
***Two Months At The Beach -- No Sunburn ....... as as on March 12, Marine salvage company Titan Maritime LLC returned the 4,038-TEU containership M/V APL Panama to her owners, Mare Britannicum Schiffahrtsges Mbh & Co., after successfully freeing the ship from a sandbar near Ensenada, Mexico. The 874-foot vessel ran aground Dec. 25 with about 2,000 containers aboard, but salvage crews were unable to dislodge the vessel until they tried a new tactic at the end of Feb. -- to dredge a channel allowing seawater to float the vessel. Titan, acquired by Crowley Maritime Corp. in Sept., said the operation was one of the largest refloatings of a laden containership ever undertaken. Included in the mobilization were 20 truckloads of salvage gear, five 300-ton hydraulic pullers, 7 tugs with a combined 5,000 tons of bollard pull, a 400 ft. flat deck barge upon which the pullers were mounted, 3 crawler stick cranes of varying sizes, a SkyCrane helicopter & a dredge and many, many, many dollar bills.
***Dubai Ports World Sells American Trouble ....... as the company which was forced by opposition in Congress to give up its stake in U.S. port facilities, are confident it can sell the North American subsidiary in its entirety rather than piece by piece even as their asking price continues to rise. DP World acquired P&O Ports North America, which has terminal operating rights and cargo handling businesses in nearly 24 East & Gulf coasts ports, as part of its US$6.8Bn acquisition on March 8 of Peninsular and Oriental Steam Navigation Co. The North American subsidiary represented less than 10% of P&O's profits, but based on the acquisition price company officials in congressional testimony earlier this month valued the U.S. business at US$700M. Speculation on potential buyers has centered around the 3 largest American terminal operators. Marine Terminals Corp., based in Oakland, has expressed interest in the P&O business. >>>>> Further to the theme, Australian joint venture spent US$3.8Bn to operate the Indiana Toll Road on Interstate 80 for 75 years. The same group also took over operation of the Chicago Skyway last year.
***Dubai Ports World Buys Indian Trouble ........ as it is in trouble again, this time in India. Forced to pull up stakes in the U.S. after an uproar about a foreign government from the Middle East operating U.S. port facilities, the Dubai-owned company now finds its US$6.8Bn P&O purchase has upset some in India, the British paper The Independent reported. The acquisition, combined with DP World's existing operations there, put DP World in charge of about 50% of the container volumes in India and some have called on the central and regional governments to block the transaction for antitrust reasons. DP World has container terminals in Kochi and Visakhapatnam. P&O has terminals in Mumbai, Chennai and Mundra. An Indian transport workers union said the deal creates a monopoly for DP World in the container business, and asked the government to reverse the deal.
***Dubai Ports World Defeats Eller -- Gets Fees......... as it completed its US$6.8Bn takeover of P&O, over the objections of Fort Lauderdale, Fla.-based Eller & Co., which co-owns part of a terminal in the Port of Miami through a joint venture with a P&O subsidiary. Eller argued that Dubai's links to terrorism could cause U.S. authorities to block the deal or revoke operating leases and cost Eller US$150M in lost business at the port. Eller's U.K. lawyer also claimed that companies have threatened to withdraw business from terminals operated by DP World. Britain's High Court dismissed Eller's claims & declared that Eller had filed a nuisance suit without merit -- making it responsible for P&O's court costs, which could amount to US$450,000.
***Honduras & Pakistan Give More In War On Terror ....... as they has agreed to allow U.S. Customs and Border Protection officers on location to help identify suspicious cargo for pre-loading exams at the Port of Cortes in Honduras & Port of Qasim in Pakistan as part of the U.S. Container Security Initiative. Local Customs officials in both countries will use X-ray type container imaging technology for inspections, and in a new addition to CSI operations, will provide live video monitoring to ensure the integrity of the cargo exam process. Port of Cortes in Honduras is the 44th overseas port participating in the program & 1st Central American port in the CSI program. It will also participate in the U.S. Dept. of Energy's National Nuclear Security Administration's (NNSA) MegaPorts Initiative. The Dept. of Energy will install large-scale and sophisticated radiological detection equipment to identify nuclear material.
***Ten Thousand Eyes At Sea ........ as cargo vessel captains & crews will help the U.S. Coast Guard monitor security conditions in ports around the world under a cooperative agreement with the World Shipping Council. Vessel carriers will submit reports on how well ports are complying with the International Ship and Port Facility Security Code, which has been in force since July 2004. There are 7 countries that do not meet ISPS requirements. Vessels that have called at ports in those countries are boarded at sea and may be subject to other restrictions, such as daylight-only transit or even denial of entry into U.S. waters. U.S. Coast Guard officers have visited ports in 44 countries, but a lack of resources has limited the scope of the compliance checks. The Coast Guard has only 20 inspectors, 13 for all of Europe, Africa, Latin America and Central America and 7 for Asia, meaning that foreign ports do not get frequent checks. Members of the World Shipping Council, which represents carriers that serve the U.S., will now be additional eyes and ears for the Coast Guard in foreign, as well as U.S. ports.
***Big Apple Gaps? ....... as the Port Authority of New York and New Jersey is not properly screening truck drivers going into port terminals, the New York Times has reported. A new federal report from the Dept. of Homeland Security's Immigration and Customs Enforcement division found that nearly half the drivers whose backgrounds were checked had possible criminal histories, the Times said. Most of the histories involved minor crimes, but there were also many felony convictions on drug or weapons charges. The report suggested that the failure to screen drivers left ports vulnerable to criminal acts & even terrorism, the paper said. The examination of the drivers' backgrounds was initiated after DHS &emdash; which operates radiation detectors at the New Jersey terminals &emdash; noticed that some of the drivers whose trucks had sounded false alarms had criminal records, the Times reported. DHS subpoenaed the Port Authority for records from its Sea Link program, which is intended to help move truck traffic quickly past security gates by clearing drivers before they arrive, the Times reported.
***Cheaper & On Time ........ as Drewry Shipping Consultants, a maritime consulting firm based in London, said liner trades from Asia during the off-peak months of Jan.& Feb. saw double-digit freight rate decreases. In a separate study, Drewry's said the average percentage of on-time arrivals for liner vessels was just 57% while monitoring 1,070 vessel arrivals during Dec. 2005 & Jan. 2006. The transpacific route stands out as one of the most reliable routes, with 65% of ships arriving on time, and an average deviation of just 0.7 day.
***Problem: Big Ditch Just About Full ........ as the Panama Canal Authority (ACP) broke 2 single-day throughput records this month, one for total tonnage & another for handling maximum-sized vessels. On March 13, the canal handled 1.07 million Panama Canal/Universal Measurement System (PC/UMS) of tonnage. Then on March 16, the canal handled 46 "super" vessels, or ships 91 feet or more in beam. There has been a steadily increasing demand for passage through the canal, leading to an emphasis on throughput capability. Experts say the canal will soon reach full capacity.
***Solution: Build Bigger Big Ditch ........ as the cost & schedule for the Panama Canal Authority to build a new lane for post-Panamax ships is due shortly. The authority is proposing to build a third set of locks capable of accommodating 10,000-TEU ships up to 19 containers wide with 50 feet of draft. Current canal physical restrictions prevent the waterway from handling the raft of 8,000-TEU and larger vessels coming online in the next few years, while Arias said demand for the canal will far outpace capacity if the expansion is not undertaken. Transit fees for containerships will rise from the current US$49 per TEU to US$54 in 2007.
***Rare Merchant Flag In The Far East ........ as American-flagged ocean carrier Matson has re-entered the world of Int'l shipping in Feb., with a five 2,600-TEU ships offering one of the fastest services between China & Southern California -- 11 days. The carrier is hoping its primary markets, Hawaii & Guam, provide the westbound backhaul that will be the backbone to a successful entry into the competitive transpacific market. The 1st to arrive in Long Beach was M/V Matson Manulani. Nice to see this merchant flag again on the stern in Asia waters.
***German Buys Russian ........ as ocean carrier Hamburg Sud has agreed to purchase the assets of Fesco Ocean Management Ltd., a subsidiary of Russia's Far Eastern Shipping Co. (FESCO), relating to services between Australia/New Zealand and Asia as well as North America. Under terms of the acquisition Hamburg Sud will take over nine chartered vessels with nominal capacity ranging from 1,000 TEUs to 1,750 TEUs and three 2,750-TEU newbuildings due to be delivered in the second half of this year. Hamburg Sud will also take 15,000 containers from FESCO. Both parties declined to give financial details of the transaction or to discuss if any staff transfers will happen. FESCO's services between the United States and the Russian Far East, the Russian Far East and ports in China, Japan, Korea and Vietnam, and services in the Russian cabotage trades are not part of the sale.
***Björk Buys Baltic ........ as Swedish liner agency & forwarder, Björk. Eklund Group, has bought a 33% share of Baltic Transport Group (BTG) to help expand its operations into the Baltic States, Russia & other parts of the former Soviet Union. No financial details disclosed.
***Goodbye Norasia ......... as Hong Kong-based Norasia Container Lines, a subsidiary of the Compania Sud Americana de Vapores group, has changed its name to CSAV NORASIA.
***COSCO Names A Giant ......... as its 2nd in a series of five 9,500-TEU containerships, built by Hyundai Heavy Industries in Korea, will be M/V COSCO Ningbo. The vessel is owned by Greek ship owner Costamare & is chartered out to COSCO for deployment on the weekly Asia/Mediterranean/north Europe Loop 1/NCX service of the CKYH alliance.
***Kicking It Up A Notch ....... as starting April 3, beneficial cargo owners moving containers in and out of the ports of Los Angeles and Long Beach during daytime weekday hours will be charged US$50 per TEU, rather than the US$40 they had been charged since July 2005 under an extended gate hours plan. For terminal operators, the program has been successful, as roughly 33% of all containers are now being moved at off-peak hours, compared to 10% to 15% before PierPass came into effect. However, most drayage firms are charging shippers a fee smaller than the PierPass fee to move and store containers at night, a fee that might go up with the increased PierPass fee.
***Caffè Spice Espresso Marble Mocha Macchiato Americano Dolce Latte Container Sensor .......... as Starbucks Corp. said it will install high-tech sensors in its cargo containers of coffee beans shipped to the United States and Europe from Guatemala, the Associated Press reported. The world's leading coffee retailer said it will use "CommerceGuard" sensors from General Electric Co. to detect whether anyone opened cargo containers during shipment. The sensors attach magnetically to the inside of containers and record any opening of the doors, AP said. GE said a 3 month test of its sensors showed they accurately recorded each time a cargo container door was opened during shipment. The device, about the size of a stapler, magnetically attaches to the inside of the container and uses an electronic proximity sensor to detect and record when the door is opened. The identification number and status of the box is uploaded to fixed or handheld readers at ports, railheads, truck yards or warehouses by short-wave radio. The information is then transmitted from the readers by wireless communications to a GE database that can be accessed by authorized customers and customs authorities. The internally mounted device is considered a step up from electronic seals, which can be bypassed by criminals who know how to remove and replace the entire door without disturbing the seal on the exterior handle.
***Chilly Reefer Market? ....... as A.P. Moller subsidiary Maersk Container Industri A/S said this month that "due to a heavy decline in market prices for reefers and the low U.S. dollar," it will end production of refrigerated containers at its plant in Tinglev, Denmark, where 250 jobs are expected to be lost. On the other hand, Maersk will continue production of the reefers in Qingdao & Dongguan, China. Sorry, Tinglev, but you cost too much.
***The Worm Has Turned? ........ as the Vancouver Port Authority has announced new & stronger requirements to its mandatory Truck Licensing System, developed in the aftermath of a 6 week truck strike last summer that crippled cargo movemen. The new regulations include more rigorous safety, security & environmental standards on all container trucks and container truck operations at Lower Mainland ports. The port authority is also requiring truckers to comply with container terminal reservation systems and to use extended hours of operating at terminal truck gates.
***Husky Terminal & Stevedoring Now Pulls Green ........ as the major Port of Tacoma terminal operator has begun using biodiesel fuel for all diesel-operated vehicles & container handling equipment. Prior to making its voluntary switch to biodiesel, Husky used about 11,200 gallons of low-sulfur diesel fuel per month. Now, Husky will begin using a 20% blend of biodiesel with low-sulfur diesel and plans to increase that blend to 40% biodiesel by this summer.
***Throughput >>> Port of London Authority said throughput at its port facilities rose 1% in 2005 to 53.8 million tons. >>> Port of Marseilles-Fos, France, rose 5% after the first 2 months of this year to 142,000 TEUs. >>> Port of New York and New Jersey handled 4.79 million TEUs in 2005, a 7.6% increase. >>> Port of Virginia handled 169,000 TEUs in Jan., a jump of 11% growth over the same month 2005.
***West Coast Throughput >>> Port of Los Angeles reported a 13.3% decline in its box throughput to 480,814 TEUs in February from 554,465 TEUs in the same month 2005. >>> Port of Seattle handled 136,994 TEUs in Feb., a drop of 10.9% compared to the same month in 2005. The results for Los Angeles & Seattle are in contrast to the Port of Long Beach, which handled 515,464 TEUs in February, a 3.5% rise over 582,614 TEUs in the same month in 2005.
***FMC Revokes 24 U.S. OTI l Licenses For Failure To Maintain Valid Bonds ......... the firms are Air-Land & Sea Transport, Houston; All Shore Forwarders, New York; Cargo U.K., Atlanta; Constan Shipping Corp., Houston; Dockside Management, Miami; Elite Int'l Logistics, Inglewood, Calif.; Joseph Esposito, Bloomingdale, N.J.; Home Run Shipping Int'l, Rosedale, N.Y.; I.M.S., Alexandria, Va.; Josephine D. Mima-Saito, Canyon Country, Calif.; LAFCO Americas, Miami; Latin American Forwarding Co., Miami; Overseas Expediters, New York; Perfect West, Carson Calif.; Raymond Express Corp., Safa Shipping, Houston; South San Francisco, Calif.; San Pedro, Pacifico D., San Francisco; Safeway Purchasing Construction Co., Miami; Seawinds Freight Services, South San Francisco, Calif.; Sunrise Cargo Services, Miami; Stuart Logistics, Charleston, S.C.; Tampa Int'l Forwarding, Tampa, Fla.; Traffic Marketing Development Services, Smithtown, N.Y.; and World Connections, Los Angeles.
***Down The Magic Pipe .... as Wallenius Ship Management Pte Ltd., operator & manager of a fleet of car carriers, has pleaded guilty in a New Jersey federal court to 7 felony counts involving pollution and obstruction of justice. The Justice Dept. said that in Nov., the U.S. Coast Guard received information from crew members about "various environmental offenses" aboard M/V Atlantic Breeze, a Wallenius car carrier. The Coast Guard subsequently boarded the vessel in Port Newark, N.J., to conduct a port state control inspection. On the ship, the Coast Guard discovered equipment -- referred to by the crew as the "magic pipe" -- that "had been specially fabricated and used to bypass the ship's pollution prevention equipment and to discharge oily waste directly into the ocean," the Justice Dept. said. It was determined M/V Atlantic Breeze had been discharging oil-contaminated bilge waste into the ocean since 2002. Under terms of the plea agreement, Wallenius Ship Management will pay a US$5M criminal fine and an additional US$1.5M payment to community service projects administered by the National Fish & Wildlife Foundation.
***This Month In U.S. Navy History ..........
1783 - At the conclusion of the American Revolution, Congress orders all Continental naval vessels and privateers home.
1815 - USS Hornet captures HMS Penguin in a battle lasting 22 minutes.
1862 - Ironclad ram CSS Virginia destroys USS Cumberland & USS Congress.
1898 - USS Holland, the first practical submarine, is launched.
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.
1917 - USS New Mexico (BB 40) is launched as the 1st dreadnought with turboelectric drive.
1919 - The Navy installs and tests a Sperry gyrocompass, in the first test of an aircraft gyrocompass.
1942 - Adm. Ernest King becomes both Chief of Naval Operations & Commander, U.S. Fleet.
1943 - The Numbered fleet system is established.
1943 - The Battle of Komandorski Islands prevents Japanese reinforcements from reaching Attu.
1946 - USS Missouri (BB 63) departs the United States to return the body of a deceased Turkish ambassador to Turkey for burial. Missouri arrived in Istanbul April 5.
1966 - Operation Jackstay is the Navy's 1st amphibious assault in Vietnam's inland waters.
***Breaking News .......as at press time our good freinds at Wavyline report that a ship carrying a cargo of red paint has collided with a ship carrying a cargo of purple paint. Both crews were marooned.
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!! Don't miss the pirate attack on M/V Seabourn Spirit
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. You will be amazed.
SPECIAL NOTE: Please view the dramatic new pictures at our special "Gallery of Cargo Loss" website feature.
See our new feature for March. 2006: "Mis-Fortune" -- continuing coverage with an expert on-scene of M/V Hyundai Fortune, afire in the Gulf of Aden. No other news organization has such an on-scene expert. But now, there is no other news source for the "Fireworks" controversy.
See our other feature for March 2006: "A Day At The Beach" -- continuing photo coverage of M/V APL Panama, which grounded at Ensenada, Mexico -- floated free on March 10. Unique coverage you will see nowhere else.
See our feature for Feb. 2006: "Scheldt Snafu!"
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..............
Biometric Warehouse Locks
Crash Pad Service ........ for your traveling crews
Cruising On Cargo Ships
Delaware River Maritime Enterprise Council ......... Port of Philadelphia
Importance of U.S. Crews On LNG Tankers ........ free webcast.
Logistics Salaries Come Back To Earth
Piracy & Armed Robbery Against Ships Off Somalia
RFID Matures In Supply Chain
"The On-Demand Tipping Point in Supply Chain" .........complimentary copy.
U.S. Navy and the U.S. Coast Guard National Fleet Policy ........ just released.
Note: The Cargo Letter selects these as products of interest -- without either request or pay as an industry service.
Cessna Aircraft .... a company owned 280 is missing in the California mountains tonight.
GE Electronic Security
Logistics Office of the Future &emdash; Year 2010 ........ a video from General Ellectric
Pocket Partner .......... indexed protocols, checklists & contacts for virtually every conceivable logistics emergency.
Portable Warehouse Partitions
Unreserved Equipment Auctions Online
World Trade Organization Events
3rd Annual Location Intelligence Conference ........... April 3-5, 2006, San Francisco, Renaissance Parc 55 Hotel
4th Annual South & Central American Air Freight Conference ..............19 & 20 April 2006, Intercontinental Playa Bonita Hotel, Panama City
15th Annual Int'l All Cargo Conference IAAC .......... 23-25 May 2006, Houston
2007 World Ports Conference .........27 April-04 May 2007, Houston, TX.
Counsel of American Master Mariners 2006 Conference ..........8 - 10 May 2006, Los Angeles Harbor Hotel, Los Angeles
I Foro Global De Logistica Y Comercial Internacional .........9 & 10 May,2006, Panama
Intermodal South America 2006 ........ April 26 to 28, 2006, Transamerica Expo Center, Sao Paulo, Brazil
Int'l Association of Refrigerated Warehouses -- Int'l Association for Cold Storage Construction & World Food Logistics Organization -- World Convention......... April 22-27, 2006, Walt Disney World Swan
Logistics Forum ....... May 7-10, 2006, aboard M/V Norwegian Dawn, Ex-NYC.
National Maritime Day ........... May 22, 2006
Nautical Institute 5th Command Seminar ..........11 & 12 April 2006, Houston, Texas. Also
"Ocean Freight Contracting in a Changing World &endash; Negotiations & Management Trends" ..........April 20, National Industrial Transportation League teleconference from 2-4:30 p.m. EDT.
RORO 2006 .......16-18 May 2006, Flanders Expo, Ghent, Belgium
Shipbuilding-Machinery & Marine Technology Int'l Trade Fair ..........Sept. 26-29, 2006 -- Hamburg, Germany.
Transportation & Logistics Council - 2006 Annual Conference ....... April 2 to 5 2006, Crowne Plaza Hotel, San Antonio Riverwalk in San Antonio, TX
U.S. Dept. of Transportaion, Federal Highway Administration ......... free freight in April & May 2006, Webinars
U.S. Navy Customs Border Clearance Agents
Blue Angels 60th Anniversary
Last F-14 Tomcat Flight
The Hapag-Lloyd Transport Game
Trans-Games ......... play all 68 great of our On-line games, updated for 2006!
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _______
We're sorry, but this feature will return in our The Cargo Letter  Edition for April 2006.
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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