Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
29 February 2004
Part 1 of 1
Good Tuesday 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 February 2004.
Just back from China's Pearl River Delta on cases -- I thank God for the new liver accorded our dear Kimberlee Countryman -- the start now, of her new life! 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 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 _____________
***U.S. In The Dock ....... as a World Trade Organization arbitrator has allowed the European Union to take retaliatory trade actions against the U.S. in a long-running transatlantic dispute concerning U.S. antidumping & countervailing duties. The Geneva-based trade body said the U.S. Anti-Dumping Act of 1916 breaks WTO rules (took them 88 years to notice?), and that the U.S. has failed to bring the law into conformity with the rules. The WTO concluded the EU "may suspend trade obligations against the U.S.," meaning the EU can now take equivalent retaliatory measures. The WTO decision follows a request in Jan. by the European Union & 7 countries of the Americas & Asia for a WTO authorization to impose import duties on U.S. exports, to retaliate against U.S. legislation. The dispute centers on the redistribution of antidumping & countervailing duties to U.S. domestic producers, a practice deemed to be against WTO rules. The complainants to the WTO against the U.S. legislation were the EU, Brazil, Canada, Chile, India, Japan, Korea & Mexico. In Jan. 2003, the WTO upheld complaints by U.S. trading partners concerning the law. The U.S. had until Dec. 27 to bring the law into conformity with WTO rules, a deadline that expired with no compliance by the U.S. Congress. The European Commission, pleased with the WTO arbitration ruling, expressed hope the U.S. will now amend its legislation. In a statement, the EC did not indicate whether, or when, it would impose sanctions against the U.S.
***Way Out of Balance ...... as the U.S. trade deficit for goods & services in 2003 shot up 17% (largest increase since 1999) to a record US$489.4Bn from US$418Bn in 2002. The balance of trade deficit for goods was a record US$549.4Bn, but was offset by a US$60Bn surplus in services exported by U.S. companies, according to U.S. Census Bureau statistics.
***More Customs Funding ........ as President Bush released his US$2.4 trillion budget for fiscal year 2005. The request to Congress includes US$40.2Bn for the Dept. of Homeland Security, up 10% and US$10Bn from the amount appropriated by Congress for the current fiscal year, & US$58.7Bn for the Dept.of Transportation. Overall, the administration is seeking a 9.7% increase above last year's budget for homeland security activities across several agencies. The administration proposes spending an additional US$411M for the Bureau of Customs & Border Protection, Immigration & Customs Enforcement & the Coast Guard -- with more than US$100M extra to implement the Maritime Transportation Security Act, which requires the Coast Guard to make sure ships, waterfront facilities & ports have antiterrorist security plans in place. The president seeks additional funding for many programs that affect Int'l trade. The request for Customs' budget is US$6.2Bn, up US$5.9Bn in 2004. The budget matches the US$101M authorized for the Container Security Initiative, a program to screen shipping boxes overseas, for ongoing 2004 activities, and adds another US$25M to expand the program to other ports around the world. The Customs Trade Partnership Against Terrorism -- which encourages importers & their supply chain partners to implement strong internal security measures to make sure containers are not tampered with -- receives an extra US$15.2M in the 2005 budget request, up from US$23M the agency currently devotes to the program. Customs' National Targeting Center & Automated Targeting System, responsible for ranking cargo & sifting out high-risk shipments, gets a US$20.6M boost in the budget. The budget also calls for US$50M to be spent on radiation detection monitors to screen passengers & cargo entering the U.S.
***Playing Chicken ....... as the European Commission (EC) banned U.S. poultry imports into the European Union on Feb. 25 after an avian influenza outbreak was confirmed in Texas. The EC has adopted a proposal from EC health & consumer protection commissioner David Byrne to suspend the import of live poultry, eggs & pet birds from the U.S., with immediate effect & until 23 March. The EC said avian influenza detected in Texas has a different virus strain from that currently causing the epidemic in Asia, and probably poses inferior public health risk to the Asian one. In 2003, the European Union imported from the U.S. about 9 million eggs, for a value of US$25M, and 450,000 day-old chicks, for a value of US$3.2M. The EU does not import U.S. poultry meat because current treatment of U.S. poultry carcasses is not accepted by the EU. Motels selected for the chickens do not provide cable movies.
***Maple Leaf 24 ....... as the Canadian government's version of the U.S. Bureau of Customs & Border Protection's (CBP) 24-hour rule for filing ocean shipment information prior to loading cargo on vessels overseas goes into effect April 19. Under the rule, the Canada Border Services Agency will require manifests from carriers & forwarders 24 hours prior to loading goods on ships. Canada Maritime, CAST, Senator Lines & Zim Israel -- said they will impose a US$30 surcharge to offset cost of new Canadian advance manifest reporting requirements.
***Chile ABI On Line ...... as the U.S. Bureau of CBP has completed programming changes in its Automated Broker Interface system to accommodate claims for imports subject to the U.S.-Chile & U.S.-Singapore free-trade agreements. When the Chile & Singapore agreements entered into force Jan. 1, Customs notified its port directors that system updates were still underway & that all entries with claims for preferential treatment would need to be non-ABI until further notice. Effective Feb. 23, the agency's ABI system updates are finished & ABI transmission is now available to filers to claim preference under these trade agreements.
***Canada - Mexico Security Expansion ..... as the Container Security Initiative, in which U.S. inspectors are based overseas to help identify high-risk containers for screening, will be expanded to 14 additional foreign ports, bringing the total number of active CSI ports to 31. About 5 to 6 checkpoints will be added on each border with Mexico & Canada that can electronically pre-clear trucks, bringing to 18 the total number of crossings under the Free & Secure Trade program. This said, U.S. - Mexican Border security is, respectfully, a joke. Someday soon there will be no laughing. Mexico border secure? Geeez!
***U.S. & Bahrain At The Table ....... as they have started negotiations to lower tariffs & barriers and expand trade between the countries. "An FTA (free trade agreement) with Bahrain will promote the [Bush administration's] initiative to advance economic reforms in the Middle East & the Persian Gulf and to establish a Middle East Free Trade Area (MEFTA) by 2013," said U.S. Trade Representative Robert B. Zoellick in a statement. U.S. goods exports to Bahrain in 2002 totaled US$419.2M, including planes, machinery, vehicles, pharmaceutical products, toys, games & sports equipment. Agricultural commodities that could benefit from an FTA include U.S. meats, fruits & vegetables, cereals, & dairy products, the USTR said. Bahrain's goods exports to the U.S. in 2002 totaled US$395.1M, including apparel, aluminum, fertilizers, organic chemicals, mineral fuels & oils, plastics & electrical machinery. The Bush administration plans to conclude a FTA with Bahrain by the end of the year.
***UPS Voted Number #1 ...... as it once again has been rated the "World's Most Admired" company in its industry in a Fortune magazine survey, & also ranked in the Top 10 among the world's companies on all 9 of the attributes evaluated. The recognition marks the 6th consecutive time UPS has been ranked the "World's Most Admired" in its industry by Fortune. It follows a similar ranking announced earlier this week in which UPS was rated "America's Most Admired" company in its industry for the 21st consecutive year. In the "World's Most Admired" list, UPS received an overall ranking of 8.61, far ahead of its nearest competitor. The rankings were compiled based on an evaluation of 9 criteria, including quality of management, quality of products & services, innovation, long-term investment value, financial soundness, employee talent, social responsibility, use of corporate assets & globalness. Beyond the No. 1 ranking in its "delivery" industry category, UPS was named the top-ranked company in the world on the attribute of financial soundness. It also was ranked in the Top 3 in the world on quality of management, quality of products & services, long-term investment value, use of corporate assets & social responsibility. Wow!
***UPS Supply Chain Solutions -- "Company of The Year" ........ as the 3PL unit of UPS, world's largest customs broker, has been named "Company of the Year" by the Traffic Club of New York for its leadership in the logistics & transportation industries. The award is presented annually to the company that the Traffic Club believes has been at the forefront of the logistics & transportation industries during the previous year. "I'm honored to accept this award on behalf of our employees," said Bob Stoffel, president of UPS Supply Chain Solutions. "Our purpose at UPS is to enable global commerce for our customers by synchronizing the flow of goods, information & funds. UPS Supply Chain Solutions represents the expanded capabilities we've developed to get that job done."
***Changes At The Rag Rack ..... as apparel industry experts predict that mass customization will play an increasingly significant role in the industry, according to a survey conducted by FedEx Corp. at the Feb. 2004 MAGIC Marketplace in Las Vegas. The survey of representatives from a cross-section of the apparel industry found that more than 90% agree mass customization, the production of high-quality, custom-made clothing at competitive prices with fast delivery, will play an important role in the next 5 years. Further survey results showed that 54% of respondents are now selling, producing or sourcing more than half of their products in countries other than their own, & more than 50% of respondents say they are doing so more than just 5 years ago. Among those surveyed, many noted the cost of production (33.9%) as a core issue, closely followed by the time to delivery (31.1%) & the logistics of getting products into customers' hands (28.7%).In fact, more than 25% of those surveyed cited inventory management as having the most impact on their ability to remain competitive. The increasing importance of managing a global supply chain highlights key challenges in the apparel industry, including:
-- Customs clearance (27.2%);
-- Time in transit - customs delays (24.8%);
-- Understanding duties & taxes (19.3%);
-- Shipment visibility - tracking (15.7%).
***Origin Morphing ....... as U.S. Bureau of Customs & Border Protection published an updated list of factories from 6 countries that U.S. importers should avoid doing business with because they are suspected of illegally transshipping textile goods or convicted by their governments of false country of origin claims to get around U.S. quotas. The transshipment watch list covers Botswana, Cambodia, El Salvador, Hong Kong, Macau & Taiwan. U.S. companies advised that orders they place with manufacturers on the watch list will be subject to detention until Customs obtains production documents proving the clothing items were produced at the designated factory instead of in another country. Updated List.
***Down In The Dumps ........ as the U.S. Dept. of Agriculture's Foreign Agricultural Service has accepted petitions from 7 industry groups requesting trade adjustment assistance for alleged declines in domestic producer prices by more than 20% due to imports. Petitions were filed by a freshwater prawn producers group in Kentucky, the National Alfalfa Alliance, the North Carolina Fisheries Assn., & Southeastern Fisheries Assn. the Tropical Fruit Growers of South Florida filed 2 petitions -- for fresh lychee producers & another representing fresh longan growers. The Foreign Agricultural Service will begin public hearings on these matters, starting March 2 on the trade adjustment assistance petitions. If the Foreign Agricultural Service's determinations are positive, the petitioners will be eligible to apply to the USDA's Farm Service Agency for technical help at no cost & adjustment assistance payments.
**Blind Ambition .......... as the Canadian government has slapped duty penalties on wood Venetian blinds & slats from Mexico & China after a preliminary determination that Canadian producers were being harmed by imports dumped at below fair market prices. The Canada Border Services Agency, previously known as the Canada Customs & Revenue Agency, said it will assess provisional duty of 120%, the estimated margin of difference between the imported prices & normal Canadian export prices. The complaint was lodged by Canadian manufacturer Stores de bois Montreal Inc., which alleged that dumping practices by foreign competitors have resulted in reduced market share, lost sales, & price declines.
***Slime Affixed Labels Don't Stick ........ as the U.S. Agency for Int'l Development's Office of Inspector General said a California-based shipper pleaded guilty Feb. 9 to circumventing the country's "Buy America" policy in supplying components for a U.S. foreign assistance program. Lei Jack Chen, former president of Jackmoon USA, admitted to the U.S. District Court at Los Angeles that he helped fellow employees in removing of "Made in China" labels from parts & packaging for shipments of components used to support a USAID telecommunications project in Egypt & replacing them with "Made in USA" designations. Chen is also alleged to have destroyed invoices and other papers associated with the parts. Chen's guilty plea is part of a 2 year investigation. He is scheduled for sentencing May 3. The "Buy America" provision is congressionally mandated for components used in U.S. foreign assistance programs. Feature.
***When There is No Conscience ............as Chicago-based chemical shipper Morton Int'l, & its affiliates in Semoy, France, & Tokyo, agreed to pay a US$647,500 civil penalty to the U.S. government to settle charges for alleged illegal exports. The Commerce Dept.'s Bureau of Industry & Security (BIS) alleged that in 1999 Morton Int'l shipped thiodiglycol on 1 occasion & attempted to export on 2 others to Mexico without proper licenses. Thiodiglycol is a controlled export for chemical & biological reasons. The agency also charged that on 10 occasions between May 2000 & May 2001, Morton Int'l exported organo-inorganic compounds to Singapore & Taiwan without required licenses. Between Oct. 1997 & Sept. 2000, BIS found that Morton Int'l S.A.S. in France committed 19 violations of the Export Admin. Regulations by re-exporting organo-inorganic compounds to Israel, Poland, & Tunisia without proper licenses.
***Running A Little Late ....... as some freight shipments across North America could be delayed due to a strike by about one-third of Canadian National Railway Co.'s workers. The railway is a major conduit for shipments of automobiles and many other products between Canada & the U.S. Its intermodal operations, which involve ocean containers & truck trailers moved long distances on railcars, could be affected because union workers operate the cranes that move such shipments on/off rail cars. CN said it would continue to operate normal schedules, with management staff performing tasks usually handled by members of the Canadian Auto Workers union. The existing union contracts expired Dec. 31.
***Beefy Battle ...... as 100 containers of imported red meat, worth about RM12 million, have been stuck in Malaysia's 3 ports due to bureaucratic red tape. If the perishable goods are not claimed by its importers soon, there will be a shortage of beef, mutton & buffalo meat. The containers belong to 40 importers, whose products make up about 85% of the country's red meat supply. Malaysian Meat Importers Assn. secretary Dr. R. Santirakesu said the current red meat supply in the country was running low. The importers were unable to claim the containers as the Veterinary Services Dept. was delaying the issuance of letters of approval, an administrative document required by the importers to obtain a permit to 'discharge' the cargo from the ports. The problem began last Nov. when the department tried to streamline procedures in importing red meat into Malaysia. Since then, the department had stopped issuing the letters. Despite the importers' appeal and a series of meetings with the department and Agriculture Ministry officials, the matter has yet to be resolved. Malaysia imports 6,000 tons of Indian beef & 1,000 tons of Australian & New Zealand beef & mutton monthly. The industry is worth about RM500 million annually.
***Phoenix Int'l Freight Services Forges Alliance ....... as it has formed an alliance with Geodis, a leading European logistics operator, for shipments to/from France & the U.S. "Phoenix will work with the Geodis Overseas division of Geodis Group," explains Stephane Rambaud, a native Frenchman & Phoenix's president. "Our combined annual volumes of 187 million pounds of air freight & 335,000 containers of ocean freight extol our ability to exceed client expectations." Phoenix also opened 2 logistics offices in Guangzhou & Zhongshan, China, in the Pearl River Delta manufacturing center (from where The Cargo Letter has just returned) -- bringing Phoenix's global office count to 46, including 8 in China & 18 in the Pacific Rim. Phoenix Int'l
***Taking The Name ...... as logistics services provider Kuehne & Nagel Int'l AG has changed the named of its wholly owned subsidiary from USCO Logistics to Kuehne & Nagel Logistics Inc. in a move to further integrate the company that it bought in 2001. The renamed entity is one of the largest warehouse-based logistics service providers in the U.S., operating some 12 million square feet in 40 facilities across the country. Kuehne & Nagel Int'l has 19,000 employees at 600 locations in 96 countries.
***UPS Supply Chain Solutions Has Flex Global View ............as it has announced enhancements to its customs brokerage service including new technology tools for better status visibility of shipments; alert systems to monitor the progress of critical shipments before, during & after customs clearance, and greater imaging capabilities for easier retrieval of documentation. Each year, UPS-SCS files more than 4 million customs entries in the U.S., making it the nation's largest broker. It also has customs operations in 120 other countries. Specific enhancements will include "Flex Global View" technology, which will allow customers to obtain multiple levels of detail about shipments. A "profiling & alerting" feature proactively informs customers when shipments reach key milestones during customs clearance. The "sensitive entry" watch list monitors specific shipments' progress, flagging those deemed critical by customers. And an individual "line item status" feature provides improved item-by-item visibility into consolidated customs entries. UPS-SCS also is adding imaging enhancements that provide for the electronic capture & archiving of trade documentation, which eliminates physical storage requirements, increases efficiency in retrieving stored records & makes information immediately available for a faster audit cycle. UPS-Supply Chain Solutions
***If Your Cargo Glows....... as Berkeley Nucleonics Corp. has announced release of the nukeALERT 951 Early-Warning Radiation Detector, a highly sensitive radiation monitor that discreetly detects & measures gamma radiation in a micro-sized package. With this new technology, responders now obtain early warning of potentially threatening radiation sources. Inspectors also benefit in locating radiation from behind shielding or at very low levels. The nukeALERT 951 is the essential tool for non-technical users with applications in emergency response, border patrol, cargo inspection, & counter-terrorism. It is designed & built to meet U.S. Customs specifications.
***On Time -- On Employee? ....... as a jury has awarded US$3.24M to a former FedEx truck driver who claims the shipping giant failed to stop sexual harassment that escalated to sabotage of her truck. The federal jury in Harrisburg, PA, on Feb. 25 found FedEx liable for a hostile work environment & retaliation against Marion Shaub but under the Pennsylvania Human Relations Act. Shaub was awarded US$2.5M in punitive damages, US$391,000 in back pay & US$350,000 for pain & suffering. "The sad part is, I loved my job. All these people I considered my friends," Shaub, 47, said. A federal Equal Employment Opportunity Commission complaint alleges that Shaub's male coworkers told her women should be "barefoot & pregnant" & that she "looked like a porn star." Shaub also claims her brakes were loosened, the brake lines were cut & the lines were filled with dirt. In each instance she was able to retain control of the vehicle
***Smugglers Fashion Alert ....... as a 35-year-old Briton smuggled 9,000 ecstasy tablets past 8 customs officials in Thailand before being stopped on the street the next day & arrested for not wearing a shirt. "Sh*t happens," said Alan John Kiernan, who arrived in Thailand from Switzerland on 1 Feb. & made it through customs with the ecstasy haul -- worth 88,000 British pounds -- hidden in special panels sewn into his sweatpants. Indeed, this guy is a "little sh*t."
2. The Cargo Letter Financial Page __
**ABX Air, Inc. DOWN as for the year ended Dec. 31, 2003, ABX reported revenue of US$1.16Bn and a net loss of US$446.9M or US$8.52 per share. The loss resulted from a US$466.1M impairment charge, net of taxes, taken during 3rd quarter of 2003. Excluding the impairment charge, net earnings were US$19.2M, or $0.33 per diluted share. For the year ended Dec. 31, 2002, ABX had net earnings of US$13.3M, or US$0.23 per diluted share. ABX became an independent public company Aug. 16, 2003, as a result of the separation from former parent company, Airborne, Inc., which was acquired by DHL Worldwide Express. Accordingly, results for 2003 reflect 227 days of operations as a wholly owned subsidiary of Airborne, Inc., & 138 days as an independent public company.
**Alpine Aviation Inc. DOWN with revenues of US$10.3M & net consolidated loss of US$1.4M in fiscal year ended 10/31/03.
**APL Liner. UP with operating profit (earnings before interest & tax) of US$406M for 2003, as compared to a loss of US$72M in the previous year. Revenue at the container-shipping unit soared 21% last year to US$4.2Bn.
**C.H. Robinson Worldwide, Inc. UP as net income increased 21% to US$29.4M in 2003.
**EGL Inc. UP with 4th-quarter net income up 37% to US$9.1M from US$6.7M in 2002.
**Eurotunnel. DOWN with a loss of $2.36Bn for 2003. Geeez! Take the ferry.
**Int'l Shipholding Corp. (parent of Forest Lines & Waterman Steamship Corp.) UP as Q4 net income at the New Orleans-based shipping company reached US$1.7M, up from US$793,000 for same quarter in 2002 -- 4th quarter revenue rose to US$62M, from US$60.4M a year earlier.
**P.A.M. Transportation Services Inc. DOWN as net income for 4th quarter was US$1.8M or 16 cents per share, compared with US$4M or 35 cents a year earlier.
**Neptune Orient Lines (parent of APL Liner & APL Logistics) UP with a net profit of US$429M in the year ended Dec. 26, over from heavy losses of US$330M in 2002.
**Qantas. UP with net profit after tax was US$357.8M for the 6 months to 31 Dec. 2003.
**Stolt-Nielsen S.A. DOWN with a net annual loss of US$315.9M, as compared to a deficit of US$102.8M in previous financial year.
**Stonepath Group. UP as net income was US$4.9M, and included a non-cash tax benefit of US$1.7M for quarter ended Dec. 31, 2003, up from US$1.3M. Revenue was US$69.9M for 4th-quarter of 2003, a record, up from US$43.3M for the year-ago period.
**Target Logistics. DOWN with net income for 2nd quarter of US$153,902, or $0.01per diluted share, compared with net income of US$1.2M, or $0.09 per basic & $0.05 diluted share for 2nd quarter 2003.
**U.S. Xpress Enterprises, Inc. UP as net income for 4th quarter of 2003 was US$2.6M, or $0.19 per diluted share, compared with net income (before a charge of US$1.7M related to settlement of litigation matter) of US$1.4M, or $0.10 per share, in 4th quarter 2002. Net income after the litigation charge was $522,000.
**Yang Ming Marine Transport UP with 500% increase in net profit in 2003 to US$195M.
***Japan Ocean, Inc....... as Nippon Yusen Kabushiki Kaisha (NYK Line), Mitsui O.S.K. Lines & Kawasaki Kisen Kaisha Ltd. ("K" Line) all reported strong results for 9 month period ended Dec. 31, backed by higher freight rates, with profits more than double their full-year earnings for 2002.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs _____
***Transatlantic Not To Be Free? ........ as the EU has broken off talks with the U.S. on creating a free transatlantic aviation market that would lift restrictions on foreign ownership & carriage within domestic markets, the Wall Street Journal reported. The EU rejected an offer by U.S. negotiators to increase the allowable levels of foreign controlled voting stock in an airline to 49% from 25%, a proposal that did not catch fire in Congress when proposed last year by the Dept. of Transportation. The U.S. also offered to expand landing rights, but the EU wants to go right to open competition rather than take incremental steps to open the current system of restrictive bilateral aviation agreements. Talks could bog down because it is an election year in the U.S. & job losses to foreign competition are a hot topic in the presidential campaign. The Bush administration might find it politically hard to agree to a deal that could cost U.S. airlines jobs if foreign carriers come & take some business. Negotiations on a comprehensive treaty began in Oct. & the 4th round of talks scheduled for March 29 in Brussels.
***Star Alliance Long Hauls ....... as the world's biggest airline confederation is developing joint specifications for new long-haul planes that its member carriers expect to buy from The Boeing Co. & Europe's Airbus -- to establish the same standards to enable interoperability & code-sharing between members. The long-haul standards currently being discussed with the alliance's 15 airlines would encompass planes such as the Boeing's new B-7E7 - which is still on the drawing board - and Airbus models such as the A330 & A340. Singapore Airlines, a Star Alliance member, is now operating the Airbus 340-500 for its 18-hour Los Angeles-Singapore route, the world's longest nonstop commercial flight. Star Alliance's joint specifications would cover numerous items that affect aircraft throughout their entire life cycle, including cargo holds & cargo handling. Star Alliance groups 15 airlines including Lufthansa, Singapore, United, Thai, Varig & Asiana.
***Heavyweight Cooperation ........ as Lufthansa Cargo has joined forces with express & logistics giant, DHL, to operate 5 Int'l routes between Asia, Europe & North America from March 28 to create the biggest operational cooperation in the industry. DHL said its customers will profit from reduced transit times. Lufthansa Cargo said that the shared network will be operated with MD11 freighters, & both companies will share the available capacity. This is the biggest deal ever.
***China Southern Airlines Unveils A Giant....... as the largest airline in the People's Republic of China has outlined a new program for its cargo operations for 2004, with the goal of generating cargo revenue in the airline's main business revenue beyond 20%. This June, the cargo terminal at new Guangzhou Baiyun Int'l Airport will open -- in which China Southern Airlines holds a 70% share. The cargo terminal has been designed as a modern logistics center with a total 105,000 square meters. There will be 5 freighter aprons & the cargo terminal will be equipped with 50 X-ray security-check machines, warehouses for special cargo such as animals, frozen or dangerous goods -- annual cargo handling capacity is expected to reach 800,000 tons in the 1st phase, 4 times of the capacity of the carriers' current Guangzhou cargo base. In 2003, China Southern Airlines' total cargo & mail volume reached 464,000 tons, which was No. 1 in China for 3 consecutive years.
***Thai Airways Int'l Has Had A Belly Full ...... as it will establish a dedicated air freight division, in cooperation with one or more other airlines & forwarders. Thai earned US$590M on air cargo last year, 20% of the company's total revenues. The carrier forecasts annual growth in air freight of at least 10%. Thai will release its plans in the next few weeks, including the number & qualifications of partners & planned routes. The carrier acknowledges there have been complaints from some exporters about limited belly space on the carrier's 83 flights for their products, especially perishables, which are a mainstay of Thailand's trade. The airline will base its all-cargo unit at the new Suvarnabhumi Airport, due to open in Sept. 2005.
***Vietnam Beckons .......... as American Airlines plans to open an office in Vietnam & increase code-sharing flights to 5 U.S. cities as traffic mounts. Vietnam Airlines also has plans to become a sizable carrier in Southeast Asia by 2010. The airline intends to increase its fleet to 49 in 2005 and to 73 in 2010, after posting a revenue of US$750M last year. The airline has set a target of moving 85,000 tons of cargo in 2004, marking a 10% increase compared with the previous year. Delivery of 2 new Boeing 777s & 4 Airbus 321s this year is seen to make Vietnam Airlines more competitive.
***Atlas Air Holdings Empty Wallet ...... as Atlas Air & Polar Air Cargo will operate under bankruptcy after parent company Atlas Air Holdings filed for protection from creditors. The move was expected for several months as the Purchase, N.Y.-based company struggled with mounting losses & legal troubles stemming from improper accounting of revenue that forced the company to restate earnings for several quarters. In Dec, Atlas said it was working to renegotiate equipment lease and debt terms ahead of an anticipated bankruptcy filing on Feb. 1. Atlas officials stressed that service would continue without interruption. Atlas said it has secured US$50M in conditional debtor-in-possession financing & exit financing to help get through bankruptcy.
***Nippon Cargo Airlines Expands Fleet ....... as Japan's only all-cargo air carrier ordered 3 new Boeing 747-400 freighters this month to replace older aircraft in its fleet. The planes will enter service in 2005 & 2006 on the Tokyo-based airlines' European and North American routes. Nippon Cargo Airlines, whose principal shareholders include All Nippon Airways & vessel operator Mitsui O.S.K. Lines, operates 10 747-200 freighters & one 747-100 freighter. The 747-400F comes with a front-end nose door & can carry a maximum payload of 120 tons, 25 tons more cargo than the 747-200. Nippon Cargo also is considering acquiring used 747-400s that have been converted.
***Big Market -- No Seats ........ as Pemco Aviation Group Inc. & Malaysian Airlines System will work together to convert older passenger jets to cargo configurations in the Southeast Asia market. Under the partnership, Pemco will contract out conversion business from other airlines in the region to Malaysian Airlines. Pemco will help Malaysian Airlines get a conversion program set up at its facilities. Pemco is certified to convert 737-300s & eventually may seek permission to convert other aircraft.
***American Air Sting ........ as following a sting operation, 14 workers at Miami Int'l Airport were indicted Feb. 23 on charges of smuggling cocaine & heroin from Latin America to the U.S. -- dubbed "Operation Return Flight." The current or former airport workers were charged with drug conspiracy after a 4 year investigation. Undercover agents were able to enlist the defendants to help smuggle drug shipments of up to 200 pounds that authorities planted on planes in Costa Rica, Panama & Venezuela. The defendants, all U.S. citizens, sometimes arranged to load the drugs onto planes. Once the shipments arrived in Miami, they allegedly unloaded them and helped send the drugs to undercover agents in Baltimore, Dallas, Nashville, Tenn., & San Juan, Puerto Rico. If convicted, they face from 5 years to life in prison. American Airlines assisted in the investigation. Among those indicted were 11 current or former American cargo workers. The sting was similar to an investigation that led to the arrests of 58 airport workers in 1999. That case, in which undercover agents used fake cocaine to catch those arrested, mostly involved workers at American Airlines & catering company Sky Chef.
***Russian Tragedy........ as a man -- apparently a Russian - who lost his wife & 2 children in an airplane collision has been arrested on suspicion that he stabbed to death the air traffic controller on duty at the time of the accident, officials said Feb. 26. Law enforcement officials declined to identify the man or give his nationality, but evidence they disclosed indicated the 48-year-old man -- who spoke only broken German - was a Russian on a visit to Switzerland. Prosecutors said the man has denied killing the 36-year-old controller at the victim's home near Zurich airport -- in front of the deceased's wife. The Danish-born controller was working alone when 71 people, including 45 Russian schoolchildren headed for a vacation in Spain, were killed in the July 1, 2002, collision in the southern German area for which he was responsible. The man's wife, son & daughter were among the victims in the in-flight collision of a Russian charter airliner & a cargo plane.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
***Bad Week At Sea ..... as these are only two of the many losses & deaths:
**Aftermath of M/V Zim Mexico III ..... as for 5 days, ships were waiting in the Gulf or on a closed Mississippi River while efforts were underway to find M/V Lee III's missing 5 member crew & remove the vessel from the river. The 178-foot M/V Lee III sank after colliding with 534-foot container M/V Zim Mexico III in fog.
**M/V Bow Mariner -- exploded with 3.5 million gallons of industrial ethanol -- killing at least 18 crew off Virginia, Feb, 28.
For more information, go to the our Website.
***What is A "Shipper"? ........ as following complaints made by ocean carriers, the U.S. Bureau of Customs & Border Protection will postpone its proposed change of the definition of a "shipper" in regulations requiring the advanced submission of cargo data under the Trade Act of 2002. Customs had earlier intended to enforce, effective March 4, a ruling that carriers must submit information on "shippers", defined as "the owner or exporter" of the cargo, via the Sea Automated Manifest System. This definition of "shipper" deviated from the previous one used in the 24-hour rule on advanced cargo transmission, for which the shipper could be an exporter or an intermediary (OTI). U.S. Customs said the purpose for this delay in its definition ruling is to allow the agency "time to review a petition submitted by trade representatives challenging the definition of shipper." Industry groups have expressed concerns over the proposed rule requiring "the identity of the actual shipper (the owner & exporter) of the cargo from the foreign country." The argument is that the proposed definition of "shipper" in many cases would not be the shipper in any currently recognized commercial or legal sense, and it would in many cases be an entity with which the ocean carrier has no contractual relationship & about which the ocean carrier has no direct information - through an NVOCC. Because the information will come from bills of lading, carriers must be able to use the same definition of the shipper as that used in the B/L, the industry groups said, noting that the shipper on the B/L may or may not be the cargo owner or exporter. When the ocean carrier's shipper shown on the B/L is an intermediary, applying the rule would require ocean carriers to obtain information not on its customers, but on the NVOCC's customers. The rule as currently written would create "massive confusion & uncertainty in the industry" when enforced, trade associations warn. Customs was asked to delete the amended definition of "shipper," or "more appropriately ... to place the information-reporting requirements for 'actual shipper' information on the parties to the underlying import transaction, not the carrier, which is a party only to the transportation contract."
***Heave To! ....... as U.S. Navy forces can board thousands of commercial ships in Int'l waters to search for weapons of mass destruction under a landmark deal signed last week between the U.S. & Liberia, the world's No. 2 shipping registry.
***Breakbulk & Bulk Carriers Caught Short .... as they are rushing to comply with mandatory rules for automated filings of manifest information for inbound cargo shipments. A U.S. Bureau of Customs regulation on Dec. 5 gave the ocean carriers until March 4 to comply with mandatory electronic manifest filing provisions in both the 2002 Trade Act & 2002 Maritime Transportation Security Act. Many breakbulk & bulk carriers that make infrequent calls to U.S. ports have traditionally relied on their vessel agents in arrival ports to process their inbound cargo manifests with Customs -- including use of the vessel agents' SCAC (Standard Carrier Alpha Code) numbers & Int'l carrier bonds. These carriers must now use their own SCAC numbers & obtain the necessary US$50,000 bond for customs clearance purposes. SCAC numbers may be obtained through the National Motor Freight Traffic Assn. in Alexandria, Va., and sureties provide the bonds.
***Europe East Coast South America Conference UP ........ as it is the latest carrier group to announce its members plan to increase southbound rates by US$310 per TEU, effective April 1.
***Far Eastern Freight Conference UP ....... as April 1 westbound rate restoration will be an additional US$150 per TEU for export shipments from Far East origins, including Hong Kong, Macau & China to North Europe, Mediterranean ports & Scandinavia. Member lines of the Far Eastern Freight Conference are ANL Containerlines, APL, CMA-CGM, Egyptian National Shipping Co., Hapag-Lloyd Container Line, Hyundai Merchant Marine, "K" Line, Maersk Sealand, Malaysia Int'l Shipping Corp., Mitsui O.S.K., NYK, Norasia Container Lines, OOCL, P&O Nedlloyd & Yangming Marine.
***Assn. of West India Trans-Atlantic Steam Ship Lines UP ..... as the liner conference of the Europe/Caribbean trade has revised a planned April 1 rate increase upwards because vessel charter rates have gone up. The conference carriers announced 3 westbound rate increases for 2004, starting with a US$125 per TEU increase on April 1. The rate increase on April 1 will now be US$250 per TEU. This will be followed by 2 further increases on July 1 & Oct. 1, details yet to be released. The Assn. of West India Trans-Atlantic Steam Ship Lines carriers are: CMA CGM, Compania Sud Americana de Vapores, H. Stinnes, Hamburg Sud, Hapag-Lloyd and P&O Nedlloyd.
***Ship Limit Raised ...... as compensation for maritime loss of life & property claims "will increase significantly" after the Int'l Maritime Organization's 1996 protocol becomes effective May 13. Malta was the 10th IMO member state to sign the protocol on Feb. 13, thereby triggering entry into force 90 days later of the 1996 Protocol to the 1976 Convention on Limitation of Liability for Maritime Claims. Under the 1996 Protocol the liability limit for claims for loss of life for ships not exceeding 2,000 gross tons is US$3M. The limit for property claims is US$1.5M. For larger ships, the limit for liability is calculated at so many dollars per gross ton. The limits for claims for loss of life range from US$1,200 a ton to US$600 for each ton in excess of 70,000 tons. The limits for property claims vary from US$600 a ton to US$300 for each ton in excess of 70,000 tons. The new IMO protocol could raise average compensation 20-30%.
***U.S. Is "Extra Hassle" ......... as at the end of Feb., Hamburg Sud & Compania Chilena de Navegacion Interoceanica (CCNI) will stop calling at the Port of Long Beach, Calif. on one of their Asia/West Coast of South America services, partly to relieve the extra-territorial regulatory burden created by the U.S. "24-hour rule" on shippers sending cargo to non-U.S. destinations. The U.S. Bureau of Custom's 24-hour rule applies not only to U.S.-bound containerized shipments, but also to "foreign cargo remaining on board" while the ship calls at a U.S. port en route to other countries. Hamburg Sud's & CCNI's "Asian Express Service," connecting Asia, Mexico & the West Coast of South America, will now omit calls at U.S. ports -- thereby avoiding compliance with the 24-hour rule on advanced cargo information transmission. Hamburg Sud said the U.S. requirement was "an extra hassle" for Asian shippers moving cargo to non-U.S. destination. Hamburg Sud said the change of rotation would improve transit times. The new rotation will be Yokohama, Keelung, Hong Kong, Ningbo, Shanghai, Pusan, Manzanillo, Guayaquil, Callao, Iquique, Antofagasta, Valparaiso, Lirquen, Callao (or Paita) & Yokohama.
***P&O Out of The Box ........ as Rotterdam-based Royal Nedlloyd NV said it plans to buy out Peninsular & Oriental Steam Navigation Co., its joint venture partner in P&O Nedlloyd Container Line, in a US$602M deal that will turn the container shipping joint venture into an independent, stock market-listed company. Royal Nedlloyd has agreed to acquire London-based P&O's 50% interest in P&O Nedlloyd Container for US$267M in cash & US$335M in Royal Nedlloyd stock at current share prices, representing 25% of its shares. The deal marks the culmination of years of discussions between Royal Nedlloyd and P&O about the future ownership & structure of P&O Nedlloyd, which frustrated P&O's intent to reduce its investments in container shipping. On completion of the buyout, Royal Nedlloyd will be renamed "Royal P&O Nedlloyd" & will consolidate P&O Nedlloyd as a 100% subsidiary. The company will continue to use trade name P&O Nedlloyd for its container shipping operations. Royal Nedlloyd, which also owns 50% of the Dutch airline Martinair, plans to sell its stake in the airline. Royal P&O Nedlloyd will be headquartered in Rotterdam, the traditional base of Nedlloyd, while "operational headquarters" for its container shipping operations will be in London, where P&O Nedlloyd has been.
***Show China Shipping Container The $$ ...... as the state-owned Chinese carrier is understood to be seeking to raise about US$2Bn with an initial public offering in Hong Kong this June -- a subsidiary of Shanghai-based China Shipping Group, headed by Li Kelin. Established in 1997, China Shipping Container Lines made cumulative losses of US$269M in its 1st 5 years of trading. China Shipping Group injected US$326M in capital into the container business in Dec. 2002, and in Sept. & Oct. 2003. If confirmed, China Shipping Container Lines' public offering will be the 3rd this year in the liner industry, after Royal P&O Nedlloyd (incorporating P&O Nedlloyd Container Line) & Hapag-Lloyd (including Hapag-Lloyd Container Line).
***Bigger Chill ....... as the U.S. Dept. of Agriculture's Animal & Plant Health Inspection Service has adopted regulations to extend cold treatment times for imported fruits subject to infestations of Mediterranean fruit flies, or Medfly. The USDA's new rule requires an additional 2.5 days of cold treatment to effectively kill the Medfly in bulk fruits. Most cold-treated fruit imports are treated aboard ships while in transit to the U.S. Some treatments are allowed by the USDA in authorized ports. Treatments done aboard ships must be completed before arrival. A company that specializes in the bulk shipping of fruit, estimates daily charges will be added to the cost of shipping oranges & tangerines by the additional 2.5 day cold treatment requirement: US$10,000 chartering fee (depending on vessel availability) ; US$2,160 docking fee (27 cents per metric ton with an average ship size of 8,000 metric tons); US$990 fuel at anchorage fee (5 to 6 tons at US$180 per ton) & 50 cents per pallet cold treatment fee.
***Kiwi Container Counting ...... as New Zealand Customs Service said its information system will no longer accept invalid container numbers for entries, starting Feb. 23. In general, the Int'l standard for numbering containers begins with 4 letters followed by a series of digits. If the container numbers do not comply with Int'l standards, the entry will be rejected.
***Maersk Sealand Bails ...... as joining with its sister company Safmarine from the East Coast of South America Discussion Agreement, A.P. Moller-Maersk A/S will not remain a member of the U.S./South America carrier group. The remaining carriers of the discussion agreement are: Compania Sud Americana de Vapores; Hamburg-Sud and its subsidiary Alianca; APL; CMA CGM; Evergreen; Lykes; MSC; & P&O Nedlloyd.
***New Kid Expands Rotation ....... as container shipping newcomer U.S. Lines, based in Santa Ana, Calif., has upgraded its transpacific service to weekly, as originally planned. The service now uses 5 ships of 1,600 TEUs for Shekou, Hong Kong, Long Beach.
***FMC Says Truck You ...... as it has issued an Order denying the petition of the Assn. of Bi-State Motor Carriers, Inc. to investigate truck detention practices of the New York Terminal Conference at the New York/New Jersey Port District. The motor carriers alleged that the terminals failed to establish, observe, and enforce just and reasonable truck detention practices & regulations at the Port. The Commission denied petition, finding insufficient facts. FMC Order
***Back To Work ....... as the U.S./Canada St. Lawrence Seaway system is scheduled to reopen at the Welland Canal March 23 & at Montreal/Lake Ontario March 25. The U.S. Soo Locks will open March 25.
***Ocean Resources Underway ........ with preparation of its search & recovery vessel M/V Ocean Boomer - underway for upcoming expedition in the North Atlantic -- recovery & sale of over 2500 tons of copper ingots worth US$7M from 2 World War I shipwrecks adjacent to each other, 1300ft. underwater. The expedition will begin in May of this year & completed in early fall. The Company expects to sell the recovered material on the spot market. "By initiating this mission, the Company expects to take advantage of the current rising commodity prices of base metals," said CEO Dennis McLaughlin. The next project will be recovery of a World War II cargo vessel with over 7,000 tons of copper, tin, cobalt, uranium, & tantalite valued at over US$56M. The Project
***Bad Box Blood ....... as a freight forwarder is seeking US$380,000 in reparations from 2 marine terminal operators in Long Beach. World-Wide Express, a Los Angeles freight forwarder, has filed a complaint with the FMC alleging that terminal operator Argosy Transport offered stevedoring services without a tariff, a violation of the Shipping Act of 1984. World-Wide also claims that Stevedoring Services of America Terminals, Inc. violated the Shipping Act by unreasonably refusing to deal or negotiate with it. According to World-Wide's attorney, the company in 2003 was acting as agent for a foreign manufacturer to deliver 308 new sea containers to customers. World-Wide says Stevedoring Services refused to deal with it, & referred it to Argosy & its principal S.H. Huo. World-Wide said it entered a contract with Argosy that charged rates for services, but Argosy had no published tariff. The case has been referred to the FMC's administrative judges.
***Tariff Magic? ....... as Management Dynamics, a provider of contract management software, has introduced a new application to simplify handling of NVOCC tariffs. The new NVOCC Tariff Publisher software, a module of the company's Rate Explorer application, updates & posts rate tariff changes in-house, without involving a 3rd party publisher. "For years, we have used 3rd-party publishers to maintain our rate tariff, but as our business has grown, costs of this service have become significant," said Ocean World Lines, a subsidiary of Pacer Int'l. "The NVOCC Tariff Publisher module reduces these costs & gives us control over the management of our rate tariff."
***U.S. FMC Revokes 15 OTI Licenses ...... as for failure to maintain valid bonds the firms are: A.C.M. Export Corp., Houston; ACD Cargo, Miami; Altamar Shipping Services, Tampa, Fla.; Amerindias, Miami; Crane Cargo System, Miami; Inexco Corp., San Francisco; Inter-Continental Corp., Miami; Karl Schroff & Associates, Valley Stream, N.Y.; PLS Int'l, Monaca, Pa.; Seaflet, Miami; Suarez Shipping Services, Miami; Trans-Aero-Mar, Miami; Varko International Corp., Medley, Fla.; William Riddle, Philadelphia; & World Int'l Cargo Transfer USA, Gardena, Calif.
***This Month In U.S. Navy History .......
1811 - Congress authorizes the 1st naval hospital.
1814 - USS Constitution captures the British brig Catherine.
1861 - Saratoga, a member of the U.S. African Squadron, captures the slaver sloop Express.
1933 - USS Ranger (CV 4), the first true aircraft carrier, is commissioned.
1942 - Patrol Wing (VP) 82 aircraft sinks German submarine, U-656. It's the Navy's 1st submarine kill of World War II.
1944 - Sue Sophia Dauser, superintendent of the Navy's Nurse Corps, is the 1st woman in the Navy promoted to the rank of captain.
1980 - USS Vulcan (AR 5) completes 1st six-months deployment with women as part of its crew.
U.S. Navy History Office
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!! The Mississippi River has been blocked for days by collision with M/V Zim Mexico III. Explosion of 3.5 million gallons ethanol tanker M/T Bow Mariner kills 21 off Virginia. Philippine M/V Supper Ferry 14 -- 186 missing!
But you can read all this month's disaster news at our special Internet web feature which provides full details of each event -- our Vessel Casualties & Pirate Activity Database. Bookmark the site and visit every day! Updated twice daily.
SPECIAL NOTE: Please view the dramatic new pictures at our special "Gallery of Cargo Loss" website feature.
See our new feature for Feb. 2004: "Rocknes Monster" -- a Poseidon adventure.
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..............
Dog Friendly ....... shipping & lodging pets.
"Emerging Components of Innovation" .......... logistics Webcast March 4, 2:00 pm ET -- log on from your desktop.
Exporting To The EU Help Desk
Global Trade Anyzer ........ vessel search.
"Hours of Service" -- Problem or Opportunity?
New Face of Supply Chain Execution Software
Patents To Deal With Terrorism
RFID Tags & Labels.
Status of U.S. Airports
Supply Chain Technology To Watch in 2004
"Trucks Bring It" Decals"
True Cost of RFID
"Managing The Supply Chain" ....... by David & Edith Simchi-Levi, with Prof. Philip Kaminsky of UC Berkeley, recently published by McGraw-Hill. To receive a sample chapter - (888)265-4706 or
Weather Services Int'l
4th Annual Trans-Pacific Maritime Conference ....... Mar. 8 & 9, 2004 at Hyatt Regency Long Beach.
13th Annual Int'l Air Cargo Conference & Exhibit- Gulfport-Biloxi 2004 ......... 10-13 May, at Beau Rivage Resort, Biloxi, Mississippi -- 172 exhibitors including airports, airlines, express air carriers, freight forwarders, expedited motor carriers, consolidators, integrators, logistics, trucking, security. In attendance, thousands of shippers, manufacturers, distributors & custom brokers from around the globe.
Connecticut Maritime Assn. - CMA Conference 2004 .......... Connecticut on March 22, 23 & 24 2004, Westin Hotel, Stamford, CT.
CMI 38th Conference ......... May 31 to June 4, 2004, Comité Maritime Int'l, Vancouver, BC, Canada.
Expo Intermodal ........ 21 to 24 April 2004, World Trade Center, Mexico City.
Int'l Congress of Marine Arbitrators ..........April 26 to 30, 2004, Millennium Mayfair Hotel, London.
Journal of Commerce's Short Sea Shipping Conference ......... April 19 & 20, Westin Resort in Hilton Head Island, SC
Los Angeles Transportation Club .......... Tues. Mar. 9, 2004, 11:30AM, Marriott Norwalk Hotel, 13111 Sycamore Drive. Speaker- James R. Hertwig, President of Landstar Logistics
L.A. Harbor Transportation Club .......... Sat. Evening, Mar. 6, 2004, 65th Annual Officer Installation Gala & Casino Night Scholarship Fund Raiser Aboard the Historic RMS Queen Mary.
Logistics Hong Kong ........ May 18 to 20 2004, Hong Kong Convention & Exhibition Center
National Industrial Transportation League ....... spring transportation forum March 22-23 in Arlington, Va.
"The Profitable Warehouse" ....... Webcast 11 Mar. 2004, 12:00PM - 1:00PM Eastern Time
Terminal Operators Conf. & Exhibition ......... June 2004, Barcelona, Spain.
UN Conf. On Trade & Development -- UNCTAD ....... conference to set priorities & guidelines every 4 years. The last conference, UNCTAD X, was held in Bangkok from in Feb. 2000. UNCTAD XI, is 13-18 June 2004 in São Paulo, Brazil, will focus on enhancing coherence between national development strategies & global economic processes, particularly for developing countries.
U.S. Maritime Security Expo ........ Sept. 14-15, Jacob Javits Convention Center, New York.
U.S. Military's Surface Deployment & Distribution Command ...... annual transportation & logistics training symposium in Denver, March 22-26.
San Diego Aircraft Carrier Museum ......... from 400 miles in space.
Tarnished Halo Awards
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _______
Olympic Airways v. Husain
United States Supreme Court
WARSAW CONVENTION (Flight Attendant's Refusal to Assist a Passenger in a Medical Crisis Constitutes an "Accident") The U.S. Supreme Court (opinion by Thomas, J.) held that a flight attendant's refusal to render assistance to a passenger in a medical crisis falls within the meaning of "accident" in Article 17 of the Warsaw Convention since it was external to the passenger, and was "unexpected & unusual in light of industry standards."
Rubina Husain & her husband, Dr. Hanson, were booked on an overseas flight on Olympic Airways. Due to Dr. Hanson's severe asthma & allergy to smoke, they requested seats away from the aircraft smoking section. After boarding, they discovered that their seats were only 3 rows from the smoking section. On 3 separate occasions, the flight attendant refused to move them. Dr. Hanson subsequently suffered a fatal asthma attack. Husain filed a wrongful-death suit against Olympic Airways. The U.S. District Court for the Northern District of California found Olympic Airways liable for Dr. Hanson's death, holding that the flight attendant's refusal to move Dr. Hanson was an "accident" within the meaning of Article 17 of the Warsaw Convention (Article 17). Article 17 defines "accident" as an "unexpected or unusual event or happening that is external to the passenger," not to "the passenger's own internal reaction to the usual, normal, and expected operation of the aircraft." The U.S. Court of Appeals for the Ninth Circuit affirmed. The U.S. Supreme Court also affirmed, holding that the conduct constituted an "accident" under Article 17. When determining whether an "accident" occurred, a plaintiff need only prove that "some link in the chain was an unusual or unexpected event external to the passenger." In addition, the rejection of an explicit request for assistance is considered an "event" or "happening" under the definition of "accident," and no other provisions of the Warsaw Convention suggest that there is a distinction between action & inaction when determining liability. The Opinion
Oklaholma Vs. Magnolia Marine Transport
10th Circuit U.S. Court of Appeals
Feb. 24, 2004
Court ruled that the 11th Amendment to the U.S. Constitution does not prevent removal of an admiralty case to federal court where the state involved is the plaintiff. The State of Oklahoma brought suit in state court against the owner of the tugboat that collided with a highway bridge, resulting in severe damage to the bridge & deaths. Defendant tugboat owner removed the case to federal court. The state's motion to remand back to state court was denied and the state appealed. The appellate court held that the 11th Amendment only applies in cases where the state is the defendant, so as to avoid states being involuntarily involved in federal court proceedings. Here, the state initiated the proceedings. The case was remanded for the trial court to determine whether there are sufficient bases for federal jurisdiction. The Opinion
Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News, Lloyds & other world sources.
The Cargo Letter Correspondents:
Michael S. McDaniel Esq, Editor (Countryman & McDaniel)
David Schuchman -- Interpool Corp. -- Webmaster of The Cargo Letter Archive
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