Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
28 June 2007
Good Thursday 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's what happened in our industry during June 2007!
We are often asked whether Countryman & McDaniel, conducts training seminars. Yes, from multiple Fortune 100 companies, to smaller forwarders, to the U.S. government, to insurance companies -- for years we have conducted inovative programs for domestic & Int'l claims, Customs, security, trade compliance & post 9/11 industry business practice. McD
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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 _____________
***Reaching The Magic 10% ...... as logistics costs for U.S. businesses rose 11% in 2006 to US$1.31 trillion, outpacing the economy (3.5%) & nearing the psychological threshold of 10% of productivity relative to the whole economy, according to transportation consultant Rosalyn Wilson, who authored the 18th annual State of Logistics report. Logistics costs increased US$130Bn in 2006. U.S. businesses in 2006 spent US$809Bn on transportation, which accounts for more than 66% of logistics spending, up from US$739Bn the year before. U.S. logistics costs now represents 9.9% of the Gross Domestic Product, up from 9.4% in 2005. Think about it -- 10% of every dollar spent in America is atributed to our industry. All other industries shrink in comparison
***3PLs Surge ....... as with the U.S. economy hitting a sluggish spell, 3PLs are finding that offshore markets are where the real action is&emdash;as long as the risks are understood. The aggressive growth & expansion of the global 3rd-party logistics (3PL) industry, now estimated at US$390Bn, continues to make the running of the bulls in Pamplona look like a stroll in the park. For 2006, in the U.S. alone, 3PL gross revenues grew by US$9Bn to US$113Bn&emdash;a 9.5% increase over the previous year, according to consultants Armstrong & Associates, Inc. (Stoughton, Wis.). Earnings before taxes were up 8.6% and net income margins gained 5.4% for the year. Sources agree that the greatest profit potential for 3PLs will lie in international markets as manufacturers continue offshore outsourcing and the consequential requisite expansion of globalized supply chains continue to increase. "The Int'l management transportation segment had a net revenue gain of 18% last year. If you break down the global 3PL market in terms of gross revenue, it comes to US$139Bn for Europe, US$37Bn for Japan, and US$30Bn for China, with the rest comprising other geographic areas & individual countries," said Armstrong & Associates, Inc.
***NAFTA Trade Way Up ..... as for the entire year of 2006, the value of all U.S.-NAFTA shipments by all modes was US$866.1Bn, according to the U.S. Dept. of Transportation's Bureau of Transportation Statistics (BTS). Up for the year, the top 10 states for NAFTA trade during the year were Texas (+11.4%), Michigan (+4.8%), California (+9.5%), Illinois (+16.5%), New York (+8.9%), Ohio (+9.1%), Pennsylvania (+15.9%), Tennessee (+11.8%), Indiana (+4.6%) and Washington (+8.3%). The top 5 commodities moving by all modes in 2006, were motor vehicles & parts (17.7%), mineral fuels, oils & waxes (14.0%), Electrical machinery, equipment & parts (12.4%), Computers industrial machinery & parts (12.3%) and plastics & articles listed as such (4.0%). The BTS reports that for 2006 the top 10 ports on the northern border moved 92% of all truck freight between the 2 countries, while on the southern border the top 10 ports handled 97% of the truck freight. In all, trucks moved 62% of all NAFTA freight in 2006, worth $534 billion. The top 3 northern land ports were Detroit, Buffalo-Niagara & Port Huron. The top 3 southern ports were Laredo, El Paso & Otay Mesa near San Diego.
***Singapore GST Rate Increase Effective July 1, 2007 ..... as the Inland Revenue Authority of Singapore (IRAS) has announced that the Goods & Services Tax (GST) rate will be increased to 7% from the current rate of 5% on all services & imported goods for local consumption, effective July 1, 2007. For imported cargo, prevailing GST to be applied is determined by the date of delivery into the local market from the Free Trade Zone (FTZ) or a licensed premise.
Singapore - U.S. Free Trade Agreement Fact Sheet
***Bigger Band-Aid For Copyright ...... as U.S. Customs & Border Protection has signed an agreement to strengthen enforcement of intellectual property rights laws with the General Administration of Customs of the People's Republic of China (PRC). The agreement provides for the exchange of seizure information on counterfeit goods between customs staff of the two nations designed to improve intellectual property rights enforcement. In addition, CBP and China Customs have pledged to increase visits to each other's offices & ports by both policy and operational staff engaged in intellectual property rights enforcement. During fiscal year 2006, CBP and Immigration and Customs Enforcement (ICE), two agencies of the Dept. of Homeland Security (DHS), made 14,675 seizures of counterfeit goods worth more than US$155M in domestic value. This represents an 83% increase in the number of seizures from fiscal year 2005 & a 67% increase in the value of those seizures for the same period -- all just window dressing to the major damage being done to French, German, UK & U.S. protected properties.
***Transport ID Cards Delayed Again .... as the U.S. Coast Guard has pushed its implementation of the Transportation Worker Identification Credential (TWIC) forward by publishing a request for information for rugged handheld card readers. The Coast Guard wants to acquire the readers before it begins implementing TWIC later this year at several of its 3,200 facilities and on some of its 10,000 vessels. The Coast Guard wants a single service provider to deliver a card reader that can handle TWIC's 3-factor authentication. The reader must also be able to withstand adverse sea conditions and environmental factors such as seawater. The contractor would also field-test and support the hardware & software. The TWIC program seeks to issue a biometric-based identification credential for workers at maritime ports of entry. The final rule for TWIC &emdash; released in Jan. &emdash; doesn't include a requirement for card readers at the ports. TWIC has run afoul of multiple delays, the latest of which was announced in April. Although the Transportation Security Administration awarded a US$70M contract to Lockheed Martin to begin installing TWIC enrollment centers, much of the infrastructure needed to handle the cards has yet to be put into place. Maritime workers also have complained about the cards' cost &emdash; US$137 per card including background check.
***Bangladesh Lifts Import Restrictions ...... as it has implemented an import policy designed to protect domestic products & make exports competitive. The policy took effect on 14 May 2007 in Dhaka, Bangladesh & would lift import restrictions on all but 25 items, including firearms, health & environmental hazards. The measure was introduced to assist in the development of industrialization and enhance employment opportunities within Bangladesh. The lifting of restrictions is an improvement from the previous 2003-2006 policy where 131 items were listed as restricted articles. The Bangladeshi government will monitor the market closely and will make adjustments to the duty structure when necessary. Sorry, we don't have the list.
***U.S.-Mexico Cross Border Trucking Saftey Standards ....... as the U.S. Dept. of Transportation has published additional details on safety standards & inspection program in place for its U.S. - Mexico cross-border trucking demonstration program. -- including pre-authorization safety audits of Mexican trucking companies, which are conducted by U.S. auditors in Mexico. The program is opposed by U.S. trucking companies & transportation unions
***Norfolk Southern Plans Very Big Road ......as it has announced plans to develop a US$2Bn plus rail corridor stretching from sites near both Memphis & New Orleans to New Jersey. The railroad said that the so-called "Crescent Corridor" project would roughly follow the Interstate 81 corridor as well parts of I-20, I-40, I-75 and I-85, and would speed cargo shipments and reduce highway congestion by diverting truck traffic. The project would expand & improve rail lines in various locations using improvements such as new track, rail sidings & signal improvements to remove bottlenecks, said Norfolk Southern. There was a "compelling case" for the new project, noting that just widening the existing I-81 corridor in Virginia alone would cost US$14Bn. The company plans to start 28 new trains if the corridor is developed, and the service could be used by motor carriers, intermodal marketing companies & private fleets, as well as Norfolk Southern's own intermodal units. If financing works out, Norfolk Southern said construction on the project would begin in 2008.
***FedEx Freight Canada Expands ..... as it plans to add terminals in Ottawa, Cambridge, Edmonton, Halifax and Quebec City, and expanded facilities in Winnipeg and Calgary during the next several months to increase its service capability. FedEx Freight Canada officially launched service in Feb. handling less-than-truckload shipments moving into and out of Canada and intra-Canada shipments. Watkins previously operated the Toronto facility.
***Is GE Very Wise? ..... as General Electric has introduced its VeriWise trailer-tracking technology. VeriWise can provide information on conditions in and around trailers including whether doors are open or closed, GE said. The company is now adapting VeriWise technology for rail cars, intermodal units and marine containers. More than 150,000 VeriWise units are already installed on trailers in Canada, Europe and the United States, including U.S. units operated by Wal-Mart Stores and the U.S. Postal Service, GE said.
***Schenker Consolidates At Kong Kong ..... as Deutsche Bahn subsidiaries Schenker & BAX Global recently announced they have integrated into a single entity in Hong Kong and Macau, entitled "One Schenker." Deutsche Bahn -- the German Rail System- is deconsolidating from its campaign of corporate buys in recent years.
***Deutsche Bahn Continues To Deconsolidate (Sell Off) ...... as the sale of Baltic Sea roll-on/roll-off operator Scandlines has been made as German state-owned rail & logistics giant Deutsche Bahn and the Danish Ministry of Transport and Energy agreed to sell their shares to a consortium of private equity firms and a German ship owner for US$1.98Bn. Under the agreement, which is still subject to approval by the Finance Committee in the Danish parliament & antitrust authorities, Allianz Capital Partners & 3i will both hold 40% of Scandlines' shares while Deutsche Seereederei will hold 20%. Scandlines employs about 2,900 people and in 2006 transported 374,321 trucks & trailers on its 12 services in the triangle between Germany, Denmark & Sweden, as well as to the Baltic States. Last year, the company posted an after tax profit of US$138M -- up 47% over 2005 -- on sales of US$730M. Details/
***Agility Keeps Buying ..... as the Kuwaiti logistics firm previously known as PWC Logistics has reached agreement to buy 2 Singapore-based logistics companies -- Synergy Shipping Pte Ltd. (SSPL) and Synergy Logistics Pte Ltd. (SLPL). No financial details were disclosed. The acquisitions specialize in the transportation of oilfield tubulars and related exploration & drilling equipments. They also provide a broad range of Int'l freight forwarding services between Southeast Asia, Middle East, Europe & U.S. The Agility purchasing campaign has been aggressive.
***Hub Group Takes Competitor ....... as the intermodal provider will be acquiring Interdom Partners, a privately held non-asset based intermodal marketing company & stack train service. Interdom specializes in serving domestic & Int'l shippers with 20- and 40-foot container services. It owns & operates 2 non-asset based drayage companies, located Los Angeles & Chicago. The business garnered US$90M in revenues last year.
***Menlo Tracks The Cougar ...... as the Singapore-based Cougar Logistics Corp. Ltd. is being purchased by Menlo Worldwide, LLC of San Mateo, CA. Included in the acquisition is Cougar's primary subsidiary, Cougar Express Logistics. Cougar Express is a leading Southeast Asia freight forwarding, warehousing, logistics & distribution management company. It has personnel, facilities & operations in Singapore, Malaysia & Thailand. In all, it serves 12 operating locations in the region.
***C.H. Robinson Opens In Singapore ....... as the transportation & logistics firm has opened an office in Singapore to expand its operations in Southeast Asia. The office will provide air & sea transportation, warehousing, distribution, consolidation and other value-added services for the region, the company said in a statement.
***Nuts! ....... as criminals are taking the almond industry's plea of "a can a day" a little too seriously. Containerloads of the now high-end commodity have become the targets of choice for agricultural thieves in California's Central Valley -- more than a dozen containers last year alone. Losses to thieves last year totaled almost US$2M, with most of the purloined containers headed overseas. When the thefts began last year, the growers held a series of meetings to discuss security & protection -- where it was decided not to leave full containers in yards and not to leave wheels under the product overnight. Time your loads to remain in-transit. This is good advice -- which you already knew. McD
***Albertsons Gets Sense (PakSense) ..... as the big U.S. supermarket chain has adopted a new "smart label" technology for measuring whether food shipments have been exposed to warm temperatures. PakSense labels are a 2-inch disc, sealed in food-grade packaging & are easy to use. Lights on the sensor indicate if temperature specifications have been breached & all data collected by the label can be downloaded and graphed, enabling Albertsons to pinpoint if, when & for how long, temperature excursions occurred.
***Penn State University Will Lift Us ...... as it will offer an online Master's degree program in supply chain management beginning with the fall semester. Applications for the 2-year, 26-credit, program will be accepted between July 9 & Aug. 1.
***Unbearable Rails ...... as 3 bear cubs have taken to riding the rails in Canada's Rocky Mountains in search of an easy, but dangerous, meal, a national park official said on June 13. The black bear cubs, each just a few months old and weighing only about 4 pounds (1.8 kilograms) have twice had to be pulled off rail cars after travelling about 20 km (12 miles) through the mountain passes that separate Banff National Park in the province of Alberta & Yoho National Park in British Columbia. The cubs and their mother were climbing onto grain cars stopped at a siding to eat grain that had spilled onto a platform at the rear of the car. When the trains started up, the cubs were trapped. "Mom can jump off but the little guys are too scared so they end up catching a ride," said a specialist in wildlife-human conflict with Parks Canada in Field, British Columbia. "This happened twice in the space of 2 days." Grain spilling from rail cars is a constant temptation for wildlife in the parks but often has fatal consequences. Already this year three black bears eating grain on the tracks have been killed.
***Toxic Toothpaste From "Afrlca" ..... as the Colgate-Palmolive Co. said June 14 that counterfeit toothpaste falsely packaged as "Colgate" has been found at the Port of Los Angeles & in several dollar-type discount stores in New York, New Jersey, Pennsylvania & Maryland. The company said the toothpaste does not contain fluoride and may contain diethylene glycol, a toxic chemical that is commonly used in antifreeze. In addition, the counterfeit packages examined so far have several misspellings including: "isclinically", "SOUTH AFRLCA" and "South African Dental Assoxiation." Suspect brands include Dr. Cool, Oralmax Extreme & ShiR Fresh. Geeez.
***Watch Out For "Deformed Men" & "LiquorHheads" ....... as the days of these public signs in Beijing are numbered. A campaign to correct the notoriously goofy English translations on city signs in time for next year's Olympics could mean the end for the misnomers that have confused and amused visitors for years. Officials are taking aim at menu items such as "Fried Crap" and "Acid Food," and slippery-when-wet signs that read, "To take notice of safe: The slippery are very crafty." The campaign began last year to avoid causing confusion & possible offense when visitors from around the world descend on a city that has for years featured a "Racist Park" dedicated to ethnic minorities. But to some, the "pubic toilets" and "harsh browns" will be missed. "It's too bad. They give the city a little more character," said Ian McCulloch, a Briton who studies Chinese at a local university. But authorities have pushed the language effort as much as any other, sending out camera-wielding inspectors to comb the streets in search of offenders like "Deformed Men" on handicapped restroom stalls, and "Liquor heads" seen on signs banning public drinking. A city official reports that 6,530 road signs had been changed or replaced by the end of 2006. The push has already claimed a high-profile victim. For years, the flaming-red neon sign of the Dongda Hospital for Anus and Intestine Disease loomed high over a busy street in eastern Beijing. But it recently gave way to "Dongda Proctology Hospital". One possible bone of contention will be plans by the city to soon launch a push to tighten up menus at hotels & restaurants. Visitors to the Olympics may no longer, then, enjoy the delights of "flesh fruit". But for those of us who love visiting China & it's people, there is something quite innocent & charming about having "Flute Rupes" named as our breakfast cereal. I can only imagine how badly the West would mangle Chinese if we were required to post our city signs in Cantonese or Mandarin script. I suggest we would do a far worse job. Still, how sad that the world must grow up and take itself so seriously. McD
2. The Cargo Letter Financial Page ______
**CEVA Logistics. DOWN with a net loss of US$142.4M for 2006 [Created at the end of last year when Dutch firm TNT Logistics was acquired by investment group Apollo Management &emdash; winners of the bidding war for EGL Inc. in the U.S.].
**FedEx Corp. UP as fiscal 4th-quarter profit rose 7% to US$610M or US$1.96 per share, from US$568M or US$1.82 a year earlier.
**UTi Worldwide. DOWN as fiscal 1st quarter net income fell 6% to US$18.1M or 18 cents a share, from US$19.3M or 20 cents a year ago.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ___
***The Sky's The Limit ....... as air cargo volumes are expected to triple during the next 20 years driving an increase in the size of planes ordered and a doubling of the freighter fleet to nearly 4,000 planes, Boeing said this month in its annual market forecast. The increase in freighters will translate into decreased share of cargo carried in the holds of passenger planes. Freight traffic will grow 6.1% per year, based on 6.2% growth for freight & 2.5% growth for airmail -- consistent with last year's projection. A large portion of the expanded global freighter fleet (2,480 planes) will come from conversion of older passenger planes with the remainder (870) coming from new production of dedicated all-cargo planes, Boeing said. It revised upward its 20-year projection for the world air cargo fleet from 3,563 planes last Nov. to 3,980 planes. Widebody freighters will represent 64% of the fleet, compared to about 58% today, because of their greater ability to offset higher fuel costs & operational capability.
***Buoyed By Growth -- Anchored By Debt ...... The Int'l Air Transport Assn. (IATA) reported freight demand grew 2.6% in the first 4 months of 2007, helped by route expansions and more shipments of perishable goods. Regional growth indicates Middle Eastern airlines saw 12.2% growth in demand while Asia Pacific carriers increased 3.9% in the 4-month period. North America was flat at 0.9% and demand in Europe and Latin America dropped by 0.1% and 5.5%, respectively. IATA projected airlines would achieve US$5Bn in profit in 2007, adding that it is a US$470Bn industry. "A profit of US$5Bn is peanuts. We need US$40Bn just to cover the cost of capital," an IATA spokesman. "The industry is moving in the right direction, but with US$200Bn of debt, the financial hole is deep. The challenge is to turn peanuts into sustainable profits."
***Airbus Gains Altitude Over Boeing ....... as its order books bulged at the Paris Air Show, June 18-24, which brought the European planemaker 425 bookings worth tens of billions of dollars, in a welcome distraction from troubles at Airbus and its parent company EADS. While American rival Boeing's performance at the industry's biggest gathering paled in comparison, the U.S. company went into the show at an advantage and still has the more popular airplane, the 787 Dreamliner. Boeing's CEO said the company may boost production facilities to keep up with demand for the jet. Many of Airbus' 425 orders came not from new customers but were confirmations of previous commitments to buy its planes. Airbus took in 141 new firm orders this week for the A350-XWB, the company said Friday, though that included conversions of orders for the earlier A350. The world's biggest passenger jet, the A380 superjumbo, fared less well, with just three new firm orders. Most of Airbus' bookings this week came for the single-aisle A320 family, the company said, with 198 firm orders. It also won 83 firm orders for the A330-A340 family. Airbus said a subsidiary of global leasing company Aircastle Ltd. has signed a contract to acquire 15 of the aircraft while India's Flyington Freighters upped its May order from 6 to 12. Also, MNG Airlines, the largest Turkish cargo operator, has ordered two of the aircraft plus one option. These contracts follow Intrepid Aviation Group making an order with Airbus for 20 of the planes. The A330-200F is capable of carrying 64 metric tons of cargo up to 4,000 nautical miles (7,400 kms) in its standard version, or 69 metric tons up to 3,200 nautical miles (5,930 kms) in payload-mode configuration. Overall, its orders, including firm deals & commitments, totaled more than US$88Bn at catalog prices, though airlines routinely negotiate deep discounts. That was well above the US$33.5Bn Airbus announced at the last Paris Air Show, in 2005, also based on list price. This year's show put Airbus ahead of Boeing in terms of total orders so far this year, with Airbus at 626 & Boeing at 510. Airbus led Boeing on sales for several years but fell behind in 2006. Boeing continued to pull in customers for the Dreamliner. Official Paris Air Show site:
***Boeing Readies New Freighter ...... as one of the widebody freighters with which it plans to surpass Airbus is the new 777 freighter. The airframer said it recently completed the design for 50% of the twin-engine freighter and released it to Boeing factories & suppliers so they can begin building parts, assemblies and tools. Boeing said it is on track to meet delivery commitments to airlines, cargo operators and leasing companies. Air France is the launch customer for the plane, with expected delivery in the 4th quarter of 2008. The 777 freighter will provide more capacity than any other 2-engine freighter & the lowest trip cost of any large freighter, according to Boeing. It has a revenue payload capability of 229,000 pounds (104 metric tons) and a range of 4,885 nautical miles (9,045 kms) with a full payload & normal densities, making it the longest-range twin-engine freighter. Boeing has 71 orders for the 777 freighter from 11 customers: Avion Group, Emirates, FedEx Express, Qatar Airways, Guggenheim Aviation Partners, Korean Air, GE Commercial Aviation Services, Oak Hill Capital Partners and 2 unidentified customers.
***Boeing Will Keep Globemaster Flying ...... as it is to extend production of the C-17 Globemaster military cargo plane beyond the scheduled 2009 shutdown of the assembly line in Long Beach, Calif. The aerospace firm said it will spend its own money to keep the production going, advancing parts suppliers with long lead times for the cost of parts for 10 planes not yet ordered. Boeing's change of heart came after conversations with Air Force officials, who said they want to decommission 30 aging C-5 Galaxy cargo planes and replace them with C-17s. The C-17 is one of Boeing's most visible projects, bringing in about US$3Bn in annual revenue. The company has delivered nearly 75% of 209 orders, including those for the UK, Australia & Canada.
***ATA Goes For The World ....... as World Air Holdings said shareholders will vote July 18 on the proposed sale of the company to Global Aero Logistics, parent company of ATA Airlines. Global Aero has offered to pay US$315M, or US$12.50 in cash per World share. World Airways, one of the operating companies involved in the transaction, has a fleet of passenger & cargo planes that it flies under contract to commercial passenger & cargo customers.
***DHL Sees The Future In A Star Fleet ...... as it has acquired a 49% minority equity interest and 24.9% voting interest in ASTAR Air Cargo. At the same time, the express delivery provider extended an Aircraft, Crew, Maintenance & Insurance (ACMI) contract with ASTAR through 2019. The ACMI contract has been in place since 2003. ASTAR has its flight operations in its Wilmington, Ohio hub with gateways in New York, Los Angeles & Miami. With 44 aircraft, its customer base is in the U.S., Europe and the Middle East.
***DHL Expands In N. Mexico ....... as it has a new Hermosillo gateway now operates daily flights between Hermosillo in Northwest Mexico & Phoenix, AZ, providing Int'l next-day service. The new gateway will route northbound shipments to DHL's North American ground and air hub at Wilmington, OH via Phoenix. Next-day service for packages up to 150 pounds will now be possible to DHL's entire U.S. network. Second-day service will be available to and from Guayma, Ciudad Obregon, Navojoa, Emplame & other surrounding communities.
***Return of The Jett8 ...... as Japanese shipping group NYK has invested US$5M in startup air cargo carrier Jett8 Airlines Cargo based in Singapore. Jett8 obtained an air-operator's certificate on June 8 from the Singapore government and is planning to begin services among Asia, Europe, & the Middle East, at earliest, by the end of the month.
***Wild Hares ...... as the rabbits at Milan's Linate airport seems to have only one thing on their mind, and their excessive mating & growing numbers have blocked takeoffs, landings & radar systems. Officials on June 17 mounted a daylight raid to keep these furry creatures off the runways, part of a twice-annual capture to keep the airport population under control. "There are always hares at the airport, the problem is that lately there were too many, and they cause problems with the radar and sensors that monitor the airport," said spokesperson for SEA, the company that operates Milan's airports. Blowing whistles and waving their arms frantically, some 200 volunteers spooked the hares out of their holes and into waiting nets. The airport reopened after a hare delay of just a few hours.
***Atlantic Passengers In "Holding" Pattern -- Real Potboiler On The River of Tears ...... as passengers who endured a 2 day trans-Atlantic odyssey with sewage overflowing from a jet's lavatories are getting an apology from Continental Airlines for the "poor conditions." Flight 71, with 168 customers on board, took off June 13 from Amsterdam bound for Newark, N.J., but only got as far as Shannon, Ireland, because of a problem with the lavatory. The flight resumed the next day after repair work seemed to restore smooth flow in the lavatory system, a Continental said June 21. A passenger told Seattle television station KING that sewage flowed into the aisles -- including solid material -- only one restroom was partly working & flight attendants kept serving meals but told passengers not to eat much. He called it the worst flight of his life. "I was forced to sit next to human excrement for 7 hours. ... It's a nauseating smell," Collin Brock said. He was offered a US$500 voucher. Just imagine the isle dancing -- the movements -- as that flight put its passengers in a "holding pattern." Charles Lindberg holds the record for crossing the Atlantic -- but these people have the record for holding it accross the the Atlantic! ======================================
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs _______
***Your Ocean Freight Is Late ...... as compared to the first 2 months of 2006, the latest quarter measured by Drewry Shipping Consultants indicates an 11% drop in on-time arrivals. Liner schedule reliability was at a record low on the 20 trade routes Drewry tracks. During the quarter, 23% of vessels arrived one calendar day late. Another 29% arrived 2 or more days late. A small proportion (1%) arrived 2 days ahead of schedule, which for purposes of the survey is also considered not to be on time. The survey tracked 2,144 container ship & multipurpose liner vessel arrivals operated by more than 60 carriers worldwide. Transpacific arrivals were above average at 56% on time. By carrier, Samudera & Matson scored better than 90% on time arrivals.
***The High Season Spike Approaches ...... as according to the monthly Port Tracker report traffic at the nation's major retail container ports should reach a record high in Aug., then drop off slightly in Sept. before hitting the year's traditional peak in Oct. Aug. is forecast at 1.53 million TEUs of container traffic, breaking last Oct.'s record of 1.51 million, while September is forecast at 1.49 million. October, traditionally the busiest month of the year as retailers bring in merchandise for the holiday sales season, is forecast at 1.54 million this year. Volume continued up in May, which was estimated at 1.35 million TEUs (down 1.2% from May 2006). June is forecast at 1.4 million TEUs (down 0.17% from June 2006), July at 1.48 million TEUs (up 6% from July 2006), Aug. at 1.53 million TEUs (up 3.3 % from Aug. 2006), Sept.at 1.49 million TEUs (flat from Sept. 2006), & Oct. at 1.54 million TEUs (up 2% from Sept. 2006).
***TSA Is Full ...... as the Transpacific Stabilization Agreement said June 12 its member lines are reporting close to full vessel sailings from Asia to all U.S. coasts as the peak season nears, and with concerns over network constraints are adopting a US$200-per-FEU increase to their peak season surcharges, from Aug. 1 through Oct. 31. The TSA members are APL, "K" Line, CMA-CGM, Mediterranean Shipping Co., COSCO Container Lines, MOL, Evergreen Line, NYK, Hanjin Shipping, OOCL, Hapag-Lloyd, Yang Ming and Hyundai Merchant Marine.
***Shanghai Looms As #1 ...... as it is expected to surpass Singapore as the world's busiest port in 2008. Shanghai Port had been the 3rd biggest container port worldwide after Singapore and Hong Kong since the end of 2003. However, its container throughput capacity has kept a growth rate of over 20% in the past 3 years. In the first 3 months of the year, Shanghai Port processed 5.9 million TEUs while Hong Kong handled only 5.5 million TEUs during the same period.
***China Ocean Shipping Co. At Cavite ........ as it will develop a US$3Bn shipping hub in Sangley Point, Cavite in the Philippines. They report the investment was discussed by Philippines President Gloria Macapagal-Arroyo and COSCO president and chief executive officer Wei Jia Fu during a meeting in Malacanang. Sangley Point is being developed as an Int'l transshipment point through the creation of a special economic zone.
***Enough of Delays At Felixstowe? ....... as COSCO Container Lines has decided to stop calls at the Port of Felixstowe in the UK on its weekly North China Express (NCX) service in the Asia/North Europe trade due to frustration at labor shortages that are delaying operations at the Hutchison-operated port, reports Cargonews Asia. "We are fed up with the continuing delays, and the port needs to urgently address its labor shortage problem," a spokesman for COSCO told Cargonews Asia.
***1882 Stat Up U.S. Company Looks Again At China ........ as Oakland-based Matson Navigation Co. reports the domestic ocean carrier is "actively exploring opportunities" for a 2nd route to China. The overtures come on the heels of last year's US$365M investment by the firm in vessels, containers & terminal assets to return to the Asia-America market. The now 15-month-old China/U.S. route, coming almost 40 years after the firm's failed first foray into the In'l transpacific market in the late 1960s, calls Ningbo & Shanghai as well as Long Beach, Calif. Accounting for 50,000 containers a year and with its revenue accounting for 15% of Matson's business turnover, the new route "exceeded our expectations", Matson told China Daily. Still, Matson told the English language Chinese paper, routes between the two countries possess enormous potential the firm plans to build upon.
***U.S. May Not Build Them -- But finances Them ....... as the U.S. has become the leading place for shipping companies to raise capital through stock offerings in recent years. According to figures provided by Nasdaq, 20 shipping companies have raised US$3.9BN in initial public stock offerings, and 29 shipping companies have raised US$2.6Bn in secondary offerings since 2005, more than half the money raised through stock exchanges around the world. Investors who have bought those shares have done well. Nasdaq said that since 2005 shipping IPOs have appreciated by more than 50%.
***Short Sea Shipping -- At Last -- Gets U.S. Review ........ as the U.S. Maritime Administration said legislation approved by the House Transportation & Infrastructure Committee on June 21 will establish a new program to promote short sea shipping to move cargo on the Great Lakes and along the country's sea coasts. Title IV of the bill proposes "loan guarantees of up to US$2Bn will help marine operators & shippers construct a new class of cargo vessels suitable for short sea shipping," Maritime Administrator Sean T. Connaughton said in a statement. The proposed legislation would "reduce global warming through greater transportation efficiencies and conservation initiatives. The major freight goods movement components of House Resolution (HR) 2701, the Transportation Energy Security and Climate Change Mitigation Act of 2007, will integrate the marine highway into our Nation's overall intermodal transportation system," he said. To move large container groupages by sea -- instead of by truck -- has been seen to have value in Europe. Proper planning screams for use of this system in the Great Lakes, along the U.S. East Cost & between the U.S. West Coasty Ports of Seattle, Oakland, Los Angeles, San Diego & Esenada, Mexico.
Ecomomics of Short Sea Shipping
***Saying No To Putting The Little Guy out of Work? ......... as the U.S. National Industrial Transportation League, representing shippers & transportation providers, declared its strong opposition on June 10 to a clean-air plan by the Port of Los Angeles-Long Beach to restrict truck access to companies that use less polluting engines. The ports propose to implement new fees on trucking companies that don't comply with vehicle emission standards and eventually limit the number of companies operating in the ports to those that use employee drivers rather than contracting with independent drivers. The ports argue that individual truck drivers cannot afford to upgrade their equipment even though the port will help subsidize purchase of newer trucks. But the NIT League is particularly concerned about the driver employment requirement because it would have a "negative impact on small & medium size companies currently performing services at the ports, and could drive a number of such companies out of business." The NIT League instead proposed the ports use of economic incentives to achieve the same goal of replacing older, dirty trucks. The California Trucking Assn. claims that the plan violates federal interstate commerce laws and undermines trucking deregulation rules established in 1980. The group believes that the ports do not have the authority under federal and state law to essentially re-regulate the trucking industry. The number of industry groups opposing a proposed plan by the ports of Long Beach & Los Angeles to overhaul port drayage continues to grow.
***Panama Ditch Increase ...... as the Canal's 2nd quarter offers figures for Jan. through March 2007. The waterway's tonnage metrics use the Panama Canal/Universal Measurement System (PC/UMS) which showed a boost of 6.30% for the quarter, moving from 75 million to 79.7 million PC/UMS tons. Accompanying the jump in tonnage was an increase in the number of transits of the Canal. They grew 4.7%, from 3,869 to 4,052 during the period. Included in these figures are the number of Panamax ships that transited the Canal, up to 1,559 from 1,501 during the same quarter last year. The increase was 3.90% for these vessels that are the largest to be able to transit the Canal. There was a significant 12.8% growth in the number of container ships that moved through the waterway. The 880 vessels were an increase from the 780 container ships during the 2nd quarter of 2006. Because of their size&emdash;91 feet or more in beam&emdash;those ships termed "supers" take more resources and time to move through the Canal. The number of supers moving through the Canal during the 2nd quarter was 1,930 in 2007, compared to 1,776 in 2006, an 8.7% climb in such traffic.
***Nigerian Shame ...... as a 40-foot container of wheelchairs, provided by a California donor to help disabled Nigerians, has been trapped at the Nigerian port of Onne for almost a year by the inaction of local port authorities. The 550 wheelchairs -- the first of similar donations planned by philanthropist Don Schoendorfer -- were donated through the privately run charity, the Jubilee Christian Center. The shipment arrived in Onne in Aug. 2006 and though cleared by the country's national customs officials, has not been able to get past the local Onne customs officer. Importers' agents & exporters, speaking anonymously to the paper, said the refusal of the port official to delegate authority during his frequent absences led to the current situation with the wheelchairs. Sadly, this is a common example of disgrace in other than the main Int'l ports -- where a little extra money to the right customs official will cause the cargo to be released. We truly hope that publicity might cause the Customs official at Onne -- to just do the right thing. What are these people thinking? This article is about one un-named guy at Onne Customs who just can't assemble himself to be human. A bastard for no particlar reason. Sadly, this is Nigeria.
***Throughput >>> French port of Le Havre handled 1.04 million TEUs in the first 5 months of 2007, a 25.9% increase compared to the same period in 2006. >>> Container volume at the United States' biggest complex of Port of Los Angeles & Port of Long Beach decreased 3.9% in May to a combined 1.29 million TEUs, compared to 1.34 million TEUs in May 2006. In the Port of Los Angeles & Port of Long Beach the Alameda Corridor cargo volumes have increased to more than 54 freight trains & 13,600 twenty-foot containers daily; and volumes are expected to grow in the following year -- currently, the corridor handles nearly 30% of total port throughput, including some 13,600 TEUs daily.
***This Month In U.S. Navy History ......
1812 - U.S. declares war on Great Britain for impressment of Sailors & interference with commerce.
1815 - Trials of Fulton I, built by Robert Fulton, are completed in New York. This ship would become the Navy's first steam-driven warship.
1864 - USS Kearsarge sinks Confederate raider CSS Alabama off France.
1865 - Confederate raider CSS Shenandoah fires last shot of Civil War in Bering Strait.
1884 - Navy relief expedition under Cmdr. Winfield S. Schley rescues Lt. A.W. Greely, USA, & 6 others from Ellesmere Island, where they were marooned for three years on Arctic island.
1934 - Commander in Chief, Asiatic Fleet Adm. Frank Upham reports to Chief of Naval Operations that based on analyses of Japanese radio traffic, "Any attack by (Japan) would be made without previous declaration of war or intentional warning."
1945 - Okinawa declared secure after most costly naval campaign in history. United States had 30 ships sunk and 223 damaged, mostly from kamikaze attacks, with 5,000 dead and 5,000 wounded, while the Japanese lost 100,000 dead.
1948 - Berlin airlift initiated to offset the Soviet Union's blockade access of U.S., France, & Great Britain to their sectors of Berlin.
1985 - Steelworker 2nd Class Robert D. Stethem of Underwater Construction Team 1 was killed by militant Shi'ite hijackers of TWA Flight 847. He later received a Bronze Star for his heroism.
***China Pushes The Double Standard ........ as China (PRC) has censored part of the latest installment of hit Hollywood movie "Pirates of the Caribbean" for "vilifying and defacing the Chinese," the official Xinhua news agency said June 15. The role of Hong Kong star Chow Yun-Fat, who plays pirate lord Captain Sao Feng, had been slashed in half to just about 10 minutes of screen time, the report said. It cited local magazine The Popular Cinema as saying: "The captain played by Chow is bald, his face heavily scarred. He also has a long beard & long nails, whose image is still in line with Hollywood's old tradition of demonizing the Chinese." "Chinese censors also cut Chow's line in which he states 'Welcome to Singapore' because it hints Singapore is a land of pirates ...," Xinhua added. But censorship on the big screen has little impact in China, where pirated, uncut versions of the latest movies can easily be bought on the street for around US$1. Indeed, your Editor has been offered a copy of every first run American movie for pennies in every Chinese city from Macau to Hong Kong to Shanghai for many years. So I question whether the prime insult here is from Jack Sparrow in dealing with the portrayal of Captain Sao Feng -- or from the pirated copies of the movie which just steal millions of dollars from the folks who produced the movie. The moral equivalence is just not there. Sorry guys, Captain Sao Feng is just another Hollywood bad guy. McD
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 June 2007: "Riding Down The Marquis" M/V Rickmers Dalian
See our new feature for May 2007: "Carrying Coal To New Castle" M/V Pasha Bulker
See our new feature for May 2007: "Between A Yacht & A Hard Place" M/V Madame Butterfly
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..............
Cargo & Trade>>>>>>
African Growth & Opportunity Act -- Report Shows Growth in U.S. &endash; Africa Trade
Buying & Selling Commissions In U.S. Trade
Capital Link ....... investor relations & communications firm for listed shipping companies
Chinese Companies Seeking To Buy U.S. Made Technologies & Products ........ the new U.S. Commerce Dept. rule.
Designing the Perfect Warehouse ..... a feature article
Exporting 101 For Food .......fundamental & logistical aspects of exporting food.
Flight International ......... get your free copy of the redesigned magazine with free directories & guides
Free and Secure Trade (FAST) Program ....... speeds U.S. & Canada cross border clearance
Freight Data and Statistics
How To Obtain U.S. Customs Duty Drawback (Refund)
Nigeria ........ ecomomy & trade
Pocket Guide to Transportation
Prevent Cargo Theft
Q & A About U.S. Customs Bonds
Rethinking the Approach to U.S.- Mexico Border Logistics Management ...... free report download
Slovenia ........ ecomomy & trade
Temporary U.S. Importation Under Bond
Travel Reports & Warnings ...... information on safety & security, local laws and customs, entry requirements -- issues from the Government of Canada
U.S.- China Export Control Policy
U.S. Commercial Service in Vietnam ....... rules, tips import & export
U.S. Customs Administrative Enforcement Process: Fines, Penalties, Forfeitures & Liquidated Damages
U.S. On-Time: Search by Flight Number, Airline, or Airport
U.S. -Singapore Free Trade Agreement (SFTA) ......... effective June 11, 2007.
European Airport Security Equipment Market: Investment Analysis
Federation of Int'l Trade Associations Credit Card
Tamper Seal .......... TSA & Luggage Seals
Trade Shows, Exhibitions, Conferences & Business Events Worldwide
World Trade Organization Events
2nd Air Cargo India Conf. & Exhibit ....... 23-25 Jan. 2008, World Trade Center, Mumbai
2nd Annual Canada-Asia Maritime Conference .......Sept. 10 & 11, 2007, Westin Bayshore, Vancouver, BC, Canada
3rd China Int'l Container & Inter Modal Transportation Development Forum ..... Sept. 6-7, 2006, Beijing, PR China
AAPA Annual Convention ....... Sept. 30-Oct. 4, Port of Virginia
Multimodal 2008 ........ 22 to 24 April 2008, Birmingham, UK
National Maritime Salvage Conference & Expo 2007 ........Oct. 9-11, 2007 Hyatt Regency Crystal City, Arlington, Va
OceanTech Expo 07 ...... Sept. 5-7, Providence, Rhode Island
Top Tips to Improve Your Customer's Experience & Guarantee Quality Support
Air Taxi Association ......... launched June 2007
Animator vs. Animation ....... watch your creations carefully, as they can turn on you in a Flash.
Ask For Kids
Contest Girl ....... where are the contests are & how to win.
Hypermiling. But is It Safe? ..... a motor cargo question. More
MrQuery .....mega search engine
Star Trek Meets Monty Python
Star Wars on a Banjo
Super Mario Brothers With Tesla Coils.
WeatherBonk ........ try the many unique features
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases ____
Gruver v. Lesman Fisheries Inc.
U.S. 9th Circuit Court of Appeals
June 6 2007, No. 05-35916
MARITIME LAW / SUBJECT MATTER JURISDICTION: In May 2004, Jeff Gruver worked for Lesman Fisheries,
aboard the Sunset Charge, under the supervision of the owner, Robert Lesman. In June, Gruver quit working for Lesman and began working aboard the F/V Adventurous. Thereafter, Gruver began making threatening phone calls to Lesman regarding unpaid wages. Lesman sent Gruver his final paycheck, however, Gruver claimed he was not paid in full and made one more threatening phone call to Lesman. In response, Lesman allegedly assaulted Gruver aboard the F/V Adventurous in the middle of the night. Gruver filed suit for unpaid wages and negligence damages under maritime law in federal district court. The district court dismissed the complaint for lack of subject matter jurisdiction. The Ninth Circuit reversed and held that Gruver had established federal admiralty jurisdiction for his tort claim under both a location test and connection test. The locationtest was met since the alleged assault occurred on a vessel floating on navigable U.S. waters. The connection test, which has two prongs, was met since the alleged assault had "the potential to disrupt commercial maritime activity" and the dispute over unpaid wages for maritime services rendered "has a substantial relationship to traditional maritime activities." REVERSED AND REMANDED. Read The Decision
Starrag v. Maersk
U.S. 9th Circuit Court of Appeals
May 14 2007, No. 04-56771
ADMIRALTY LAW / PACKAGE LIABILITY / SHIPPING: In August of 2000 Starrag and Maersk entered into a contract whereby Maersk transported, by sea, three machines which were subsequently damaged while being transferred across a container yard. Starrag argued the package limitation could not apply after the machines were unloaded because it conflicted with both the Carriage of Goods by Sea Act (COGSA) and the Harter Act. Both parties filed partial summary judgment motions regarding whether Maersk could enforce the package liability limitation of US$500 under COGSA. The district court granted Maersk's motion, finding that the Combined Transport Bill of Lading (CTBL) incorporated the package damage liability limit of the COGSA. The district court also held actual notice of the extension of COGSA to any damages after unloading was not required, and because there was no "delivery of the goods," the US$500 liability limit per package applied. The Ninth Circuit affirmed. Starrag argues that the Short Form does not explicitly state that the CTBL extends the COGSA package limitation through delivery, and therefore there is a conflict, rendering only the COSGA provision enforceable. However, the Ninth Circuit found that, through incorporation by reference, the Short Form limits Maersk's liability according to the COGSA, which includes limited liability up to the time of delivery, and that notice is not required in the Short Form. Further, because the CTBL states that the contract is governed by the COGSA, and the terms of that contract are extended through delivery, the Harter Act does not apply. Finally, the Ninth Circuit affirmed the district court's definition of "delivery" to require more than just physical delivery to the wharf, but also notice of arrival and an opportunity to inspect. AFFIRMED. Read The Decision
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
Andrew D. Kehagiaras, Esq. (Countryman & McDaniel)
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