Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
28 Feb. 2006
Good Tuesday Evening from our Observation Deck......overlooking the officially designated "Cargo City" area and...... Runway 25-Right, at Los Angeles International Airport, voted "Best Cargo Airport in North America." Here is our industry review for February 2006.
We are often asked whether Countryman & McDaniel, conducts training seminars. Yes, from multiple Fortune 100 companies, to smaller forwarders, to the U.S. government, to insurance companies -- for years we have conducted inovative programs for domestic & Int'l claims, Customs, security, trade compliance & post 9/11 industry business practice. McD
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Our corporate sponsor &endash;- Interpool, Inc. -- named again to Forbes "Best 200 Small Companies" List -- for the 2nd consecutive year! -- http://www.interpool.com/Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker/trade consultant attorneys at LAX.
INDEX to The Cargo Letter:
OUR Top Story***
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 Top Story***
***Any U.S. Port In A Storm ........ as Dubai Ports World's Feb. 24, announcement of a voluntary 45 day cooling off period in which it will proceed to close its acquisition of Peninsular & Orient Steam Navigation Co. on March 2 without taking operational control of U.S. facilities is a "fraud" that doesn't change anything, said an attorney representing the Miami-based company that has filed suit to force P&O to sell its U.S. terminals & port services to domestic companies. In an attempt to lower the temperature of the controversy surrounding the sale, DP World said it would proceed to take over the British port operator in its entirety, but refrain from exercising management control over U.S. operations to give the Bush administration, Congress and states governments time to sort out disagreements over regulatory approval of the sale. Critics have said that giving the United Arab Emirates, of which Dubai is a part, access to vulnerable ports raises the risk of terrorism. DP World officials have previously made clear that they intend to keep British & American managers in place to run the company.
The Dubai company said it will keep the U.S. terminals, including New York-New Jersey, Philadelphia, Baltimore, Miami and New Orleans, under P&O management while it consults with the Bush administration, Congress. "In practice, this will mean that DP World will not exercise control over, or otherwise influence the management of, P&O's U.S. operations pending the outcome of these further discussions," DP World said. At a Senate Armed Services Committee hearing Feb. 23, Stewart Baker, the Dept. of Homeland Security's assistant secretary for policy & Int'l affairs, confirmed that DP World will keep the structure of the P&O Ports North America Inc. in place, meaning that P&O Ports would operate as a U.S. subsidiary. "DP World has been working for many years with U.S. Customs, Navy & other U.S. security officials at its ports in Dubai to ensure the protection of the U.S. We are highly respected for the efficiency and integrity of our operations," said Ted Bilkey, DP World's COO (an American). "The reaction in the U.S. has occurred in no other country in the world. We need to understand the concerns of the people in the U.S. who are worried about this transaction and make sure that they are addressed to the benefit of all parties. Security is everybody's business," he added.
Criticism of the proposed port investment by a sheikdom in the United Arab Emirates has centered on concerns that a foreign government could manage U.S. marine facilities as an instrument of foreign policy to aid a terrorist attack on the U.S. But in the eyes of some the real problem is foreign companies of any type controlling terminals they believe should be reserved for American businesses. The current debate has focused on P&O's container terminals located in 6 major ports: New York and New Jersey, Philadelphia, Baltimore, Miami & New Orleans. But P&O Ports North America actually operates at least 20 facilities in U.S. ports handling bulk, breakbulk and roll-on/roll-off cargo in places such as Port Arthur and Freeport, Texas; Baton Rouge, La.; and Gulfport, Miss. P&O also handles containers at the Port of Houston and has a container joint venture in Norfolk, Va. In Jan., P&O signed a long-term lease to operate terminal at the Port of Tampa, including the recently completed Hooker Container Terminal. The deal was made possible after a U.S. company, Seattle-based SSA Marine, agreed to terminate its concession agreement for terminal space & stevedoring services, according to the Tampa Port Authority. P&O recently renewed a contract with the Defense Dept. to load & unload military equipment at the ports of Beaumont & Corpus Christi, Texas. All those operations would turn over to DP World once the sale is finalized. Industry experts estimate that up to 70% of U.S. marine terminals are operated by companies from South Korea, Japan, Taiwan, Denmark, Singapore, China & other countries.
Rep. Clay Shaw, R-Fla., has announced his intention to introduce legislation aimed at preventing foreign entities from operating U.S. seaports. Shaw's approach is favored by the Int'l Brotherhood of Teamsters and Eller & Co. Inc., a Fort Lauderdale, Fla.-based cargo handling company that has a 50% share of operations with P&O at the Port of Miami's main public terminal. The Teamsters, which has tried without much success to organize independent port drivers who shuttle containers on & off the docks to warehouses for distribution throughout the country, called on Congress to block the P&O sale to DP World because of the "increased security threat of opening our nation's ports to the UAE." Opponents of the sale say that the UAE served as operational & financial base for some of the Sept. 11, 2001 attackers, even though the Defense & State departments have emphasized that the Persian Gulf nation is a major ally in combating terrorism and supporting U.S. military forces in the region. North America only represents about 10% of P&O's business, which means it wouldn't hurt DP World to leave the U.S. facilities behind.
Partially lost in all the commotion about a foreign government-owned company acquiring the right to operate portions of several U.S. ports is the fact that Americans account for a sizable portion of the management team at Dubai Ports World .... or that 13 of 14 terminals at Port of Los Angeles are foreign operated.
As security concerns were being raised on Capitol Hill, P&O Ports announced it had signed a contract with the U.S. Surface Deployment & Distribution Command to provide stevedoring of military equipment at the Port of Beaumont and the Port of Corpus Christi. The contract continues a relationship P&O has had since 1989.
DP World Ports
Fact Sheet: Securing U.S. Ports
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs _____________
***The U.S. Trade Deficit Grows ......... as it widened to a record for a 4th straight year in 2005 as both Chinese imports & energy prices soared to record high levels. U.S. companies imported US$726Bn more goods & services than they exported in 2005, the U.S. Commerce Dept. reported. The Dec. shortfall increased to US$65.7Bn from US$64.7Bn a month earlier. China accounted for more than 25% of the total U.S. deficit last year, the most for any country. Exports also increased, to an all-time high of US$111.5Bn.
***Our Website ........ as last month we received 3,202,619 hits in 31 days -- but now we have a record of 3,845,675 hits in 28 days at an average 134,665 hits per day. Visit! See what this is about!
***Liberia Back In ....... as the Bush administration has reinstated duty-free trade benefits for Liberia under the Generalized System of Preferences (GSP) program. Liberia's GSP privileges were suspended by the U.S. in 1990 because of worker rights concerns. The U.S. government's GSP program includes 137 developing countries exporting about 3,450 different products duty free to the United States. In the first 11 months of 2005, $25 billion worth of exports entered the U.S. under GSP.
***Fakes Take A Hit ...... as U.S. shippers applauded the Senate's passage this month of legislation that further cracks down on trafficking in counterfeit goods. The "Stop Counterfeiting in Manufactured Goods Act" (H.R. 32) strengthens anti-counterfeiting laws by prohibiting the trafficking in counterfeit labels, patches, stickers, hangtags, or medallions that are unattached to goods. The legislation also makes mandatory the forfeiture & destruction of counterfeit goods, as well as the assets used to produce, package, & distribute them. In addition, it would require the forfeiture of property & assets derived from counterfeiting. The modification would eliminate ambiguity in the current statute that allows counterfeiters to avoid punishment when they transfer counterfeit goods in exchange for some future benefit. The FBI estimates that U.S. companies lose about US$250Bn a year to counterfeiters. The World Customs Organization & Interpol raise that figure to US$600Bn for global traders.
***China Was Not A Problem? ........ as final figures for 2005 show that U.S. textile & apparel imports remained steady and increased at the same level &endash; 10% for the year &endash; as during the old system of quotas that ended Jan. 1, 2005, the U.S. Assn. of Importers of Textiles and Apparel (USA-ITA) said in a statement. The trade statistics "prove that China was never going to overwhelm the U.S. textile industry or even other overseas suppliers. This reflects what we had predicted previously - that the end of the quota system would not lead to a huge surge in imports to the U.S. market," said the USA-ITA.
***UPS Opens El Salvador To Shippers ........ as the government of El Salvador has signed a cooperation agreement with UPS aimed at simplifying the Central America country's customs procedures. Last Oct., PROESA, the El Salvador government's department dedicated to promoting investment in the country, visited UPS's offices in Miami, proposing to establish a customs clearance system in El Salvador based on UPS's global operations. Under the new system, courier companies will now be able to withdraw their merchandise from Customs at the El Salvador Int'l Airport within 48 hours of the goods arriving. The agreement also considers that shipments whose value Free On Board (FOB) are lower than US$200 can be removed from Customs with the presentation of the corresponding air bill and invoice; however, a spot check of the merchandise can be requested for verification purposes. If the value FOB is more than US$200 but less than US$3,000, the removal of the goods will be authorized with the presentation of the Merchandise Declaration. This document can be created by the operator of express delivery or courier. The prices that are charged for customs procedures will be representative. The authorization timetable is valid for one year and renewable with prior authorization from the Customs Dept.
***FedEx Opens Down Under Commercial ...... as it & the Australian Trade Commission have signed a 2-year agreement to expand trade between Australia and the U.S. The agreement calls for FedEx to promote to its customers the benefits of the Australia Trade Commission's export assistance network, which is spread across 50 countries, including 18 cities in the U.S.
***UPS In Big China Splash ....... as it will open 22 distribution centers in China this spring as part of its expansion in that country, Reuters reported. Chief Executive Officer Mike Eskew said the company would continue to boost its market share in China. In late 2004, UPS bought out Chinese partner Sinotrans for US$100M & currently controls 23 distribution centers that serve 200 cities in mainland China. UPS operates 18 flights a week between China and the U.S., which will increase to 21 flights weekly in March
***56 Year Old Japan Spud Wall Falls ........ as it has agreed to lift a decades-old ban on imports of fresh potatoes from the U.S. Japan is already the largest U.S. export market for frozen potatoes, with purchases of more than US$164M in 2004, according to the U.S. Dept. of Agriculture. Japan banned fresh potato imports from the U.S. in 1950 due to phytosanitary concerns related to the potato wart bacteria and the cyst nematode. The decision to lift the import ban follows a notice from the U.S. that it has eliminated the potato wart bacteria and has contained the cyst nematode to a limited area. Japan has authorized potato imports from 14 states: Arizona, California, Colorado, Florida, Idaho, Maine, Michigan, Minnesota, New Mexico, North Dakota, Texas, Oregon, Washington & Wisconsin.
***Sugar Rush ......... as the U.S. government has increased its fiscal 2006 tariff-rate quota allocations for raw cane & refined sugar to make up for the damage caused to the domestic crop by last year's hurricanes. On Feb. 2, the U.S. Dept. of Agriculture increased the in-quota quantity of the tariff-rate quota for raw cane sugar by 226,796 metric tons for fiscal 2006. The Office of the U.S. Trade Representative reallocated 35,126 metric tons raw value of the fiscal 2006 tariff-rate quota allocations that will not be used by certain countries. The total quantity of the raw sugar allocations is 261,922 metric tons.
***The New Kid Is "Golden Gate" ......... as Golder Rauner, a private equity firm, has partnered with John Williford, John Rocheleau, and Ed Feitzinger to form Golden Gate Logistics, LLC (Golden Gate). Williford most recently served as CEO of Menlo Worldwide, the logistics subsidiary of CNF, Inc. He was responsible for launching Menlo in 1991. Rocheleau served as CFO of Menlo Worldwide from 2001-2005 and has served in several positions at CNF, Inc. Feitzinger was senior vice president of sales and marketing at Menlo, but most recently served as head of worldwide logistics at Hewlett Packard. Headquartered in Palo Alto, Calif., the new company will focus on acquiring and consolidating logistics providers in the U.S. and internationally. GTCR said it plans to invest up to US$200M of equity capital to support the building of a global logistics company.
***Schneider Logistics Buys American ....... as it has acquired American Overseas Air Freight (also known as American Overseas Logistics), an El Segundo, Calif.-based international freight forwarder and a licensed United States customs broker. Last summer, the company acquired American Ports Services, a provider of port transloading/deconsolidation, warehousing and distribution services.
***Schenker Digs Deeper At HKG ........ as the Int'l freight forwarder & Hong Kong-based StarTrans Int'l have agreed to start a joint venture freight forwarding company specializing in the Asia/U.S trade. Schenker will have the majority interest in the joint venture.
***DHX Now Flies ...... as the So. California freight forwarder & Customs Broker Dependable Highway Express (DHX) is spinning its air division into a new subsidiary called Dependable AirCargo Express.
***TNT Says Au Revoir ....... as the Dutch mail & logistics company, agreed to sell Transports Pierre Mendy and Mendy Ltda, part of TNT's French subsidiary TNT Logistics Holdings SAS, to Pierre-Michel Mendy/Groupe Lapegue. This transaction completes the disposal of TNT Logistics France
***Following Orders ........as Illinois-based "Order Logistics Inc." has acquired JAT Transportation, a truckload carrier also based in Illinois, with focus on short- to medium-haul trips, averaging 550 miles.
***Universal Truckload Services Goes Intermodal ...... as it has acquired 4 intermodal companies that will operate as part of its Mason Dixon Intermodal subsidiary. The 4 are Marc Largent, Los Angeles; Diamond Logistics, Houston; Assure Intermodal, Memphis, Tenn.; DiJulio Enterprises, Seattle. Terms were not disclosed, but the 4 generated combined gross revenue of about US$28M last year.
***Goodbye CNF ....... as part of what it describes as a corporate rebranding initiative, freight transportation & logistics company CNF said it plans to propose changing its name to Con-way Inc. CNF is the parent company of Con-Way Transportation and Menlo Worldwide, incorporating Menlo Logistics & Vector Supply Chain Management.
***UPS Goes Overnite ..... as former customers of acquired "Overnite Transportation" will begin seeing the new UPS uniforms & newly branded trucks May 1. The rebranding includes a move to the UPS logo; new colors - a gray reminiscent of the Overnite gray combined with UPS's signature brown. The facilities & fleet, which includes 22,000 trailers, will be rebranded to UPS Freight.
***The Brown Is Green ........as UPS has placed an order for 50 hybrid electric delivery trucks & will acquire 4,100 low-emission conventional vehicles this year. The hybrids are being purchased in two sizes from International Truck and Engine and Freightliner LLC. The trucks will have lithium batteries that are capable of faster re-charging and have a longer life than previous-generation hybrid batteries, UPS said. The trucks' bodies will be identical to the company's signature brown trucks. The 1st of the 50 trucks will be deployed in Dallas in June and will join more than 10,000 low-emission and alternative-fuel vehicles already in use. UPS said its alternative fuel fleet of 1,500 vehicles includes trucks powered by compressed natural gas, liquefied natural gas, propane, electricity and hydrogen.
***RFID In The Trillions........ as according to Research & Markets Corp., China is expected to use more than 5 trillion RFID tags annually due to mandates issued by Wal-Mart & European retailers. The Chinese government has taken a role in helping companies adopt RFID technology, introducing several projects to push up the development of RFID in China. The government is also planning to improve current logistics infrastructure to keep pace with the growth in manufacturing.
***UPS "Most Admired" ....... as in the Fortune rankings for the Delivery Industry, UPS was rated No. 1 "America's Most Admired" with a composite score of 8.54 on a 10-point scale, almost six-tenths of a point ahead of its nearest competitor. UPS has been ranked No. 1 in its industry for 22 of the last 23 years. UPS was ranked No. 2 in the U.S. for "product quality." It was rated No. 3 in each of the categories of "best use of assets" and "financial soundness." And it ranked No. 5 for "people management;" No. 6 for "management quality," and No. 9 for "long term investment." In a separate survey to name the Top 20 without regard to industry, UPS was rated No. 13 in that ranking.
***U.S. Rail Traffic Up ......... as RailAmerica Inc., a holding company for 43 short-line railroads in the U.S & Canada, said Jan. freight carloads rose 6.9% to 112,829 from 105,507 in the same month 2005.
***U.S. Private Truck Ownership Down ....... as repossessions & liquidations of tractor-trailer trucks nationwide rose in the 4th quarter, Nassau Asset Management said. In Nov., Nassau reported that overall equipment repossessions & liquidations during the 1st three quarters of 2005 had increased significantly for the 1st time since 2002. That trend continued in 4th quarter for tractor-trailers, rising 145%, and construction equipment, up 44%, Nassau said.
***Tragedy Suggests A New Cargo Watch ....... as following the brutal murder of a disabled taxi driver, cabbies in Sydney, Australia will receive security cameras in their cars. The city is also hiring security guards to patrol the 22 taxi ranks for the city. Two 14-year-old girls were accused of murdering taxi driver Youbert Hormozi, 53, early this month. A similar procedure has been suggested for high value motor truck cargo loads.
***Uncle Sam Says Drive, Don't Talk ....... as the U.S. Dept. of Defense has issued a regulation banning the use of non-hands free cell phones on military installations unless the vehicle is parked.
***Fake Rug Merchant ....... as U.S. Customs & Border Protection officers at Port of Savannah, recently seized more than 25,000 carpets from Egypt because of false country of origin markings to evade import laws. CBP said the fraud was designed to mislead consumers into believing the goods were made in the U.S. The carpets, which had markings of "Crafted with pride in USA" or no country of origin markings, were discovered in 5 container shipment & have a total value of US$360,544. The importer was notified 5 times during a 2 month period to properly label its products before the carpets were seized. CBP has seized more than US$14M worth of textile goods during the past 4 months, US$4M in Feb. alone. CBP has hired 45 additional import specialists &lab analysts to increase textile law enforcement efforts.
***Biggest Rig ..... as the world record for hauling the longest motor train is broken in southern Queensland. Thousands of spectators watched near Clifton on the Darling Downs in southern Queensland, Feb. 19, as John Atkinson from Brisbane used a single prime mover to pull 112 trailers for 100 meters. The record road train stretched almost 1.5 km. in length. The previous world record was set in Kalgoorlie in Western Australia and was a road train of 1,445 meters. Moving the 112 trailers the required length was not an easy task to make a new 1,474.3 meters record.
***Brown Fury ....... as to prepare UPS's 2006 TV commercials for the "Race the Truck" campaign, the company ignored animation possibilities and instead built a real racing truck, starting with a 20-year-old, 250,000-mile workhorse UPS package truck. A team of highly qualified specialists transformed the old truck, dropping in a 514-cubic-inch factory Ford SVO crate motor that generates 620 horsepower & 700 pounds of torque. The engine, in turn, was fitted with a 2 stage nitrous oxide injection system that boosts its output to 800 horsepower, allowing for low gear burnouts & an estimated top speed of nearly 150 mph on the track. Go UPS!
***Delivery At The Bottom........ as a Colombian messenger is sentenced to 4 years' house arrest for slapping a woman's bottom as he rode by her on his bicycle, sparking debate on whether punishment fit the crime. Showing re-enactments of the incident, TV news shows were filled on Feb. 24, with legal experts offering opinions about the judgment handed down by Bogota's District Court. Some said that to confine bicycle messenger Victor Garcia to his home for 4 years for smacking Diana Marcela Diaz's buttocks was excessive. Others said it would deter other men.
2. The Cargo Letter Financial Page ____________
**Alexander & Baldwin Inc. (parent of U.S.-flag operator Matson Navigation) UP with a 25% rise in 4th quarter net income to US$23.4M.
**Boeing Co. UP with a 147% jump in 4th quarter net income to US$460M, from US$186M in the year-prior period.
**Delta Airlines. UP as 4th quarter net loss narrowed to $1.2Bn, compared to a net deficit of US$2.2Bn in prior year quarter.
**Deutsche Post World Net (owner of DHL) UP as net income in 2005 jumped 39.9% to US$2.6Bn.
**Expeditors Int'l of Washington, Inc. UP with quarterly net earnings of US$80,477,000 for 4th quarter of 2005, compared with US$43,563,000 for same quarter 2004, an increase of 85%.
**Forward Air Corp. UP as income from operations was US$18.6M, compared with US$15.7M in the prior-year quarter, an increase of 18.5%.
**Hanjin Shipping. DOWN with a 25.2% decrease in its 2005 net income to US$497M. In 2004, Hanjin's net income was US$665M.
**Janel World Trade, Ltd. UP as net revenue (Revenue excluding forwarding expenses) for the period was $1,942,568, compared to $1,668,008, in the first quarter of fiscal 2005, an increase of 16.5%.
**Kansas City Southern. DOWN as hurricanes Katrina & Rita were a major factor behind the railway's 4th quarter net loss of US$1.2M, compared to net income of US$700,000 in 4th quarter of 2004.
**The Navigators Group, Inc. DOWN as net income for year 2005 was US$23,564,000 or US$1.73 per share, compared to US$34,865,000 or US$2.74 per share for the year ended Dec. 31, 2004.
**Pacer International UP as 4th-quarter net income rose 20% to US$20.4M or 54 cents a share, from US$17M or 44 cents a share in previous 4th quarter.
**Qantas Airways. DOWN as net profits for the 1st six months of its fiscal year ending June 30, dropping 9.6% to US$259M.
**Republic Airways Holdings Inc. UP as net income was US$15.9M or US$0.37 per diluted share compared to US$14.8M last year.
** Ryder System. DOWN as 4th-quarter net income fell to US$58.8M or 92 cents a share, from US$62.6M or 96 cents a year earlier, though the 2004 figures included a tax benefit of US$9.2M or 14 cents a share.
**Target Logistics. UP with net income for 2nd quarter of FY 2006, ended Dec. 31, 2005 of US$976,314 or $.05 per diluted share ($0.05 per basic share), an increase of 79%.
**TransForce. UP for 4th quarter, with a profit of US$31.3M or 41 cents a share, up from US$17.5M or 30 cents a year earlier.
**UPS. UP as net income for 4th quarter of 2005 was US$1.05Bn with global volumes climbing 7.9% to a record 16.8 million packages per day. Overall in 2005, UPS delivered some 3.75 billion packages.
**Wilh. Wilhelmsen ASA. UP with a net operating profit of US$232M total operating income of $2.2Bn.
***Penny Stock On The China Board ....... as APL Logistics' parent company Neptune Orient Lines is planning to list its joint venture CMA Logistics Co. Ltd. on the Hong Kong stock exchange. Investors will be offered 55 million shares in CMA Logistics, which provides logistics services mainly for car manufacturers & car components suppliers in China, at between HK$2.30 (US$.30 cents) and HK$2.70 (US$.35 cents) per share. APL Logistics said it expects its interest in the company to drop from 30% to 20.74% following the placement of the shares.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ______
***United Airlines Comes Back ........ as parent company UAL Corp. formally exited bankruptcy Feb. 1, after more than 3 years operating under Chapter 11 protection. UAL will trade under the ticker symbol "UAUA." The entire world wishes you well.
***U.S. Industry Looking Up .....Atlanta-based cargo market consultancy company The Colography Group Inc. forecasts that the 2005 U.S. air export shipments & revenue figures will reach record levels. Colography reported that after the 1st 3 quarters of 2005, nearly 68 million shipments moved in U.S. air export service. The consultancy anticipates full year export shipments to exceed 90 million, surpassing the 88.7 million shipment record set in 2000. Air export revenue for the first 9 months of 2005 was about US$6.9Bn. It predicts that full year export revenue will go past the US$9Bn barrier for the 1st time, breaking the US$8.5Bn record set in 2004. Colography said that during the first 9 months of 2005, there were 1.85 billion U.S. domestic air shipments with a value of about US$30Bn. Domestic shipments & revenue for the full year 2005 are projected to beat 2004 results, but fall short of the records set in 2000. The 3rd quarter 2005 edition of Colography's "U.S. Domestic and Export Air Traffic and Yield Analysis By Competitor & Market Segment" report includes the following:
* On the U.S. air export side, the 6 main competitors -- FedEx, UPS, U.S. Postal Service, DHL, EGL Inc. & BAX Global -- controlled 77.3% of shipment market during 3rd quarter of 2005.
* The "all other competitors" category -- comprised mostly of airlines & forwarders -- saw their shipment share decline to 22.7% as of the end of 2005's 3rd quarter from 24.8% in the 1st quarter of 2004.
* On the domestic front in 2005, quarterly revenue & tonnage gained on a sequential basis. However, shipment volumes declined by more than 10 million from the 2nd to the 3rd quarter, driven by continued diversion of lightweight, short-haul air traffic to the ground.
* DHL Express reported sequential gains in domestic air shipment share from 10.2% in the 1st quarter to 11.4% in the 3rd quarter.
* USPS held the largest domestic shipment share through the first 9 months. However, its share of the market declined with each quarter, from 37.9% in the 1st quarter to 36.1% in the 3rd quarter. FedEx's share declined 0.5% over that period, while DHL's & UPS's shares increased.
Colography will publish the 4th quarter & year 2005 results early April.
***ATA Also Sees Up ........ as Int'l air freight & express shipments carried by U.S. airlines increased 3.7% to 13.13 billion revenue ton-miles in 2005, from 12.17 billion revenue ton-miles in 2004, according to the U.S. Air Transport Assn. ATA Airlines are: Aloha, Alaska, American, ATA, Continental, Delta, FedEx, Hawaiian, JetBlue, Midwest, Northwest, Southwest, United, UPS & US Airways (including America West).
***EU Suspects Air Price Fixing ....... as the European Shippers' Council has backed the joint European Union and U.S. Justice Dept. investigation into pricing practices in the air freight industry. Shippers have for a long time been concerned about nearly identical levels of surcharges in respect of fuel price increases, new security measures & other factors.
***China Southern Converts ........ as the largest airline in the PRC will convert 6 of its A300-600 passenger airliners to freighter aircraft. Deliveries under this program are expected to begin in the latter part of 2007. With nearly 300 A300-600 aircraft in service today, industry analysts have estimated over 160 are reaching the end of their useful passenger life, making this airframe a candidate for conversion to a new mission as a cargo freighter, and representing a potential conversion market of more than one billion dollars.
***UPS Opens New Cologne/Bonn Sort ........ as this airport hub has been UPS's main European gateway since 1986. Total project cost for the new 813,000 sq. foot sorting facility was US$135M, the largest facility investment outside the U.S. in the company's history. The new sorting capacity of 110,000 packages per hour &endash; movement of more than 30 packages per second &endash; may easily be expanded to 165,000 packages per hour as shipping demands increase. In 2005, for example, the carrier's European export volume grew almost
***Cargo Share Deal ....... as Russian AirBridge Cargo, part of the Volga-Dnepr Group, & Emirates SkyCargo have signed an interline agreement. Under terms of the agreement, AirBridge Cargo will be able to offer cargo capacity to destinations in the Middle East, India and Africa using the Emirates SkyCargo network. In return, Emirates SkyCargo will extend its network to Moscow's Sheremetyevo airport by interlining through AirBridge Cargo's Frankfurt & Amsterdam hubs.
***You Must Mediate, Now Stop Mediating! ........ as the National Mediation Board on Feb. 22, rejected a request from the Independent Pilots Assn. to be released from mediated contract talks with UPS Inc. The NMB had declared an indefinite recess in the talks on Feb. 24. The National Mediation Board rejected a request from the Independent Pilots Assn. to be released from mediated contract talks with UPS Inc. The NMB had declared an indefinite recess in the talks on Feb. 24.
***Desert Blooms ........ as during the 2 week period prior to St. Valentine's Day Israeli flower growers delivered over 100 million flowers to the U.S. & Europe, aboard 27 freighters, flown by El Al, Cargo Air Lines (CAL) & foreign airlines which handled the shipments. St. Valentine's Day is known to be a peak export event for the Israeli flower growers, growing special highly popular red flowers. This year target markets were the Netherlands, Germany, Belgium, France, Russia, the UK and the U.S. Who knew?
***Boeing 787 Less Than 2 Years Away ........ as the new aircraft, scheduled to enter commercial service in 2008, is being designed as a long-range jet capable of carrying 200 to 300 people on routes between 3,500 & 8,500 nautical miles (6,500 to 16,000 kms) that will consume 20% less fuel than jets in use today. B-787
See the B-777 Freighter
***Flying Queen Mary 2? ......... as it could change the way you think about air travel. It's the Aeroscraft, and when it's completed, it will ferry pampered passengers across continents & oceans as they stroll leisurely about the one-acre cabin or relax in their well-appointed staterooms. The Aeroscraft cruise ship will ferry passengers across the continental U.S. in about 18 hours. Unlike its dirigible ancestors, the Aeroscraft is not lighter than air. Its 14 million cubic feet of helium hoist only two thirds of the craft's weight. The rigid aerodynamic body -- driven by huge rearward propellers -- generates enough additional lift to keep the behemoth & its 400-ton payload aloft while cruising. During takeoff & landing, 6 turbofan jet engines push the ship up. This two-football-fields-long concept airship is the brainchild of Igor Pasternak, whose privately-funded Calif. firm, Worldwide Aeros Corp., is in the early stages of developing a prototype & expects to have one completed by 2010. A cargo variant is under study.
***Spain -- Had It All In The Bag(s) ......... as the Spanish Winter Olympic Team got off to an unfortunate start to the Games with several members of the 31-strong squad still waiting for their luggage to turn up after arriving in Turin on Feb. 6. Competitors were left without skis, snowboards & cases after their luggage was lost on departure from the newly opened terminal at Madrid's Barajas airport. "Things haven't started well for reasons that have nothing to do with the competition," the head of the Spanish Olympic Committee was quoted as saying by sports daily Marca. "It's sad that we are arguing about something like this before the Games .... They are looking for the luggage in Madrid." The luggage turned up on Feb. 10. Iberia Air
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
***More Port Congestion Predicted ........ as containerized trade is projected to grow 7.6% in 2006, more than double the projections for worldwide GDP growth of 3.4%, said Paul Bingham, an economist with economic consulting firm Global Insight. It's not a new trend, but it's one that is stressing infrastructure in the U.S., Bingham told the Metrans National Urban Freight Conference in Long Beach this month. He said harmonized tariffs, relaxed regulatory policies toward foreign trade and trading blocks like the North American Free Trade Agreement have led to the large gap between trade & GDP growth. Bingham said carriers will feel the brunt of the congestion especially as fuel prices rise and employees expect higher salaries.
***Goodbye A.P. Moller-Maersk ....... as following its US$2.7Bn acquisition of P&O Nedlloyd, A.P. Moller-Maersk Sunday formally commenced trading its enlarged container shipping business under the name "Maersk Line", what most people called it all along. The majority of P&O Nedlloyd vessels will be phased in during February 2006. The large majority of services will be in place by mid March, and by June 2006 the Maersk Line network will be fully implemented. The takeover of P&O Nedlloyd cemented the Danish group's dominant position as the world's largest ocean carrier, boosting its containership fleet from slightly less than 500,000 TEUs to about 1.7 million TEUs, twice that of its nearest rival Mediterranean Shipping Co. (MSC). At the same time, the activities of P&O Nedlloyd Logistics were absorbed into the existing Maersk Logistics. In 1999, Maersk acquired Sea-Land Service and decided to market the combined activities under a joint name, Maersk Sealand.
***New Piracy Report Available ........ as the IMO issued a Circular listing reports it received of incidents of piracy & armed robbery at sea during the fourth quarter of 2005. During this period, 58 such acts were reported, which included 76 crew members being held hostage, 10 crew members injured or assaulted, and 7 vessels hijacked.
***Singapore Goes Electronic ........ as the Singapore Maritime & Port Authority (MPA) issued a Circular stating that, effective 27 Feb., it is launching a system for online submission of cargo declarations. Submission of such declarations via facsimile will be phased-out as of 1 Sept.
***The Ensenada Circus Continues ...... as APL said Feb. 22 that 621 containers have been removed from the 4,038-TEU M/V APL Panama, which remains grounded near the approach of the Mexican port of Ensenada, 2 months after it ran aground Dec. 25. The Singaporean carrier said there appears to be no cargo damage and that reefer containers continue to be powered by a generator. "The salvors intend to remove most of the containers from the ship subject to operational limitations. We will continue to notify customers as containers become available for pickup. Containers are being discharged exclusively to assist in recovery efforts; therefore we can't identify in advance which will be available for pickup," APL said. "We continue to urge you to make arrangements with your cargo underwriters to post security for your cargo. This is particularly important if you have been advised your cargo has been discharged from the ship. Secure storage space for containers ashore is limited, and we cannot deliver or on-carry your cargo unless security has been posted." The carrier also said that preparations are being made to remove a sand buildup from the starboard side of the ship that has hampered previous recovery attempts. Additional attempts to refloat the vessel were to be made near the end of Feb. See the whole amazing story at our Web Feature ........
***Validation At Baltimore ......... as the Maryland Port Administration (MPA) began compiling trucking company & driver information last week into a consolidated database, called eModal Trucker Check, that aims to enhance security measures at marine terminal truck gates. Trucking companies are required to register online & input all of their drivers' information. Under the new system, trucking companies wanting access to Maryland Port of Baltimore (MPOB) property will need to first verify driver and company information. The database will then validate their presence at the port&emdash;either approving or denying access. PierPass, the consortium of terminals operating the extended hours truck gate program in the Port of Los Angeles-Long Beach, announced in Jan. that it planned to implement Trucker Check to improve truck flow & security. No more imposter truckers at Baltimore.
***ZIM Line Circumnavigates ......... as it has added another stop on the U.S. West Coast for its round the world service. Vessels on the service will begin calling at Oakland (the service previously called only at Los Angeles) in response to market demand, the carrier said in a statement. The service new route is: Shanghai, Ningbo, Xiamen and Chiwan in China; Singapore; Port Kelang, Malaysia; Mundra, Nhava Sheva and Tuticorin in India; Colombo, Sri Lanka; Suez; Port Said, Egypt; Felixstowe; Rotterdam; Hamburg; New York, Newport News, Va., and Charleston; Kingston, Jamaica; Panama Canal; Los Angeles; & Oakland.
***Belgian Buys UK Terminal ........ as the Antwerp-based Cobelfret Group has acquired U.K. shipping company Dart Line from Bidcorp plc for an undisclosed amount. The deal included four roll-on/roll-off ships and the 55-acre terminal at Dartford, Kent, in the United Kingdom. Dart Line operates two routes across the English Channel, Dartford to/from Zeebrugge in Belgium and Dartford to/from Vlissingen in the Netherlands. Hmmm...
***Canada Losing Its Thunder ........ as the Canadian Pacific Railway will end operations at the freight container terminal in Thunder Bay, Ontario, effective April 28. The railway said the decision was a result of dwindling activity at the terminal, with a daily average last year of fewer than 10 processed containers. Traffic is expected to decrease further with the closure of the Cascades Fine Papers Group plant in the region.
***New Container Tracker........ as E2E Inc., a designer of container tracking systems, has received a U.S. patent for a security system that continuously tracks the movement of cargo in domestic and int'l shipping from point of departure to point of destination. The E2E system uses wireless electronic seals to communicate with a central computer, providing the current location of cargo at regular intervals or on demand. The electronic seals, each with its own identification number, are activated upon locking of the seal to a closed cargo container. During shipment, the seal transmits its location to the central computer, which compares the location of the shipment to a calculated expected route.
***New Container Watchdog ......... as RFID Micro, Inc.'s newest product&emdash;The Impactor&emdash;provides & records data of approximately 1,000 events including information on temperature, impact (G-Force), tilt (beyond 45 degrees), & password protected programming. All events are time and date-stamped to the second, stored in memory, and able to be downloaded. The Impactor is housed in an aluminum case and can be operated continuously for months without recharging the batteries&emdash;generally needing eight hours every 10 to 12 months. Laboratory & field-testing have shown the device can be operated at temperatures ranging from -30 degrees F to +200 degrees F.
***Queen Mary 2 Meets Her Sister ....... as the most expensive ocean liner ever built, made her Los Angeles debut on Feb. 22, 2006. To mark this special occasion, Cunard's illustrious past and dynamic present came together when Queen Mary 2, met her namesake ship, Queen Mary, in Long Beach Harbor. The historic meeting of the Queens took place at Noon on Thursday, Feb. 23. Queen Mary 2 sailed through Long Beach Harbor, sounding a greeting to Queen Mary, which is permanently docked in the port of Long Beach. The first-time whistle salute took on even more meaning as QM2 carries one of her namesake's original whistles, the tone of whose deep bass "A" can be heard 10 miles away. Thousands viewed the "Royal Rendezvous" of the 2 Queen Marys. Fireboats and a flotilla of ships, yachts & boats, as well as a squadron of skytypers, were on hand to herald this historic meeting. In another nod to history, skytyper Greg Stinis returned to the skies of Long Beach harbor for a repeat overhead performance, similar to the aerial celebration he carried out to mark arrival of Queen Mary in 1967. McD's Mom is aboard QM2 tonight for Hawaii -- Hi Mom!
***Own Your Own Aircraft Carrier ....... as a lucky bidder may come away with their very own Russian aircraft carrier -- albeit one converted into a floating theme park with a movie theater and restaurants.Bidding is expected to start at US$16M. The Minsk, a decades-old, decommissioned relic of the Soviet era, was first bought by a Chinese company for scrap metal in 1998 but then sold to an entertainment firm, which poured millions of dollars into turning the ship into a tourist attraction. The carrier opened to the public in the southern boomtown of Shenzhen in September 2000 as the main draw of the military-themed Minsk Aircraft Carrier World amusement park. A Chinese travel agency describes the theme park as "a harmonious combination of carrier appreciation, military recreation, typical seaside lifestyle in south China and military atmosphere." The ship's attractions included torpedoes & a Russian dance troupe that performed folk dances. But the company that operated the park, Minsk World Industries Co. Ltd., sank deep into the red & was declared bankrupt by a Shenzhen court in Mar. 2005. Despite the company's collapse, the theme park had stayed in business & drew 33,000 visitors during the recent Lunar New Year holiday 2006.
***Panama Is Boring ........ as the Canal Authority has christened a massive new drill barge that will be used for dredging projects in the canal. The new barge, the "Barú," is equipped with four drilling rigs that can bore holes up to 30 meters in a single pass. Drilled holes are filled with explosives, which are detonated to fracture rock meant to be removed to deepen or widen ship channels. The blasted material is removed by separate floating equipment.
***FMC Pulls Tickets ..... as it has revoked the OTI licenses of Eurocargo Express, Los Angeles; Sig M. Glukstad, Miami; and Victory Van Lines, Staten Island, N.Y., for failure to maintain valid bond.
***Astronaut On The Ocean ......... as General Electric NASSCO laid the keel this month for the "USNS Alan Shepard," the 3rd combat logistics support ship in the U.S. Navy's T-AKE program. When the vessel is completed, it will be operated by the U.S. Transportation Command's Military Sealift Command. The U.S. Navy awarded the San Diego, Calif.-based shipyard contracts for 9 new dry cargo/ammunition ships with a total contract value of US$2.8Bn. The 1st ship to be delivered was the "USNS Lewis and Clark" in May 2005. The 2nd ship, "USNS Sacagawea," will be launched in May.
***Throughput >>> Port of Boston handled 188,869 TEUs in 2005, a 7.7% increase compared to 175,444 TEUs in 2004. >>> Canada's Fraser River Port container throughput increased 17% to 372,844 TEUs in 2005 compared with 317,582 in 2004. >>> China's southern Guangzhou port jumped 39% to 4.6 mill TEU last year. >>> Port of Houston Authority, where container volumes for 2005 increased 11% to 1.6 million TEUs for 2005. >>> Port of Seattle was North America's fastest-growing container port in 2005 as a record 2.1 million TEUs moved through the harbor, a 17.6% increase over 2004 >>> Ports of Indiana's three ports on Lake Michigan and the Ohio River handled a combined 7.7 million tons of cargo in 2005, up 2% over 2004 >>> Jurong Port in Singapore handled 77,000 TEUs in Jan. 2006, up 2.7% compared to 75,000 TEUs in the same month 2005 >>> Port of Tacoma passed the 2-million-TEU barrier for the 1st time in 2005, up 15%
***This Month In U.S. Nvavy History .....
1795 - The U.S. Navy Office of Purveyor of Supplies is established, later officially recognized as the Navy Supply Corps.
1813 - USS Hornet, under command of Capt. James Lawrence, captures HMS Peacock.
1815 - USS Constitution captures the British vessel Susannah.
1861 - Saratoga, a member of the U.S. African Squadron, captures the slaver sloop Express.
1864 - The Confederate submarine H.L. Hunley sinks USS Housatonic.
1870 - After arriving on USS Nipsic, the Darien Expedition, commanded by Cmdr. Thomas O. Selfridge Jr., begins active operations ashore at Caldonia Bay. The exhibition then surveys the Isthmus of Darien, Panama, for an interoceanic ship canal.
1933 - USS Ranger (CV 4), the 1st true aircraft carrier, is commissioned.
1991 - Forces from the United States, UK, France, Saudi Arabia, UAE, Bahrain, Qatar, Oman, Egypt, Syria & Kuwait proceed with major ground, air & naval offensive to drive Iraq out of Kuwait.
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 Feb. 2006: "Scheldt Snafu!"
See our new feature for Jan. 2006: "A Day At The Beach" -- continuing photo coverage of M/V APL Panama, which remains grounded at Ensenada, Mexico. Amazing stuff!
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..............
al-Salam Boccaccio 98 Ferry Disaster Investigation
Best Practices In Value Added Order Processing
Council of Economic Advisors - 2006 Economic & Trade Report of the President
Dangerous Cargo -- The Hunt For Dirty Bombs
Loading Dock Saftey
Navy Automated Cargo Handling System
Panama Canal Changes To Tariffs........... April 1 2006.
Pipeline & Hazardous Materials Safety Administration (PHMSA) .........amended regulations reflect recent statutory changes to civil & criminal penalties for violation of regulations.
Speeding Airport Security -- A Balancing Act
"U.S.-China Trade Relations: Entering A New Phase of Greater Accountability & Enforcement" ............. Office of U.S. Trade Representative
U.S. Maritime Administration Report On Great Lakes Freight Volumes.
Free Floor Bar Code Label Kit
Mattman Specialty Vehicle, Inc. ......... to build mobile command center for the LA Airport Police Dept
Travel Law ........ the book.
zNose10-Second Gas Chromatograph Detector ........compound library for detection of Chemical Warfare (Nerve Gas) Agents (CWA)
World Trade Organization Events
3rd Annual Location Intelligence Conference ........... April 3-5, 2006, San Francisco, Renaissance Parc 55 Hotel
4th Annual South & Central American Air Freight Conference ..............19th & 20th April 2006, Intercontinental Playa Bonita Hotel, Panama City
15th Annual Int'l All Cargo Conference IAAC .......... 23-25 May 2006, Houston
2006 Material Handling & Logistics Show and Conference ........ March 27, 2006 at Cleveland's I-X Center
2006 Supply Chain Security Training Seminar For C-TPAT Certified Partners ....... March 1 to 3, Costa Mesa, Calif.
Intermodal South America 2006 ........ April 26 to 28, 2006, Transamerica Expo Center, Sao Paulo, Brazil
Int'l Association of Refrigerated Warehouses -- Int'l Association for Cold Storage Construction & World Food Logistics Organization -- World Convention......... April 22-27, 2006, Walt Disney World Swan
Logistics & Supply Chain Forum ....... May 7-10, 2006, aboard M/V Norwegian Dawn, Ex-NYC.
National Maritime Day ........... May 22, 2006
Nautical Institute 5th Command Seminar ..........11 & 12 April 2006, Houston, Texas. See also.
RORO 2006 .......16-18 May 2006, Flanders Expo, Ghent, Belgium
Shipbuilding-Machinery & Marine Technology Int'l Trade Fair ..........Sept. 26-29, 2006 -- Hamburg, Germany.
TOC Asia - Terminal Operations Conference and Exhibition & Conference for Asia. .......14 -16 March 2006, BEXCO, Pusan, South Korea
Transportation & Logistics Council - 2006 Annual Conference ....... April 2 to 5 2006, Crowne Plaza Hotel, San Antonio Riverwalk in San Antonio, TX
U.S. Dept. of Transportaion, Federal Highway Administration ......... free freight in March, April & May 2006, Webinars
U.S. Trade and Development Agency Bombay Conference ..............March 7-9, Renaissance Mumbai Hotel, Bombay
The Age Gauge
Atlanta Mile High Club
Blackbeard -- Terror At Sea
doHop Travel Search Engine ... new
For The Love of Beer
French Warship Clemenceau Turned Back To France
Last F14 Recovery ... proud history
What Was That All About? Really? For Zero.
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _______
Dolan v. United States Postal Service et al
U.S. Supreme Court
Feb. 22 2006 No. 04-848
Federal Tort Claims Act (Exception Does Not Apply to Injuries That Are Primarily Associated With the Function of Transporting Mail) The United States Supreme Court held 7-1 (Opinion by Kennedy; Dissent by Thomas) that an exception to the Federal Tort Claims Act concerning the US. Postal Service only applies to injuries that are primarily associated with the function of transporting mail rather than injuries that were caused by the mail itself. The Federal Tort Claims Act (FTCA) surrenders sovereign immunity in certain instances of negligent behavior committed by federal employees within the scope of employment. However, sovereign immunity remains as to any claim "arising out of the loss, miscarriage, or negligent transmission of letters or postal matters." Barbara Dolan (Dolan) sued the U.S. Postal Service (USPS) for injuries she suffered when she tripped & fell over a package that was left on her porch by a federal postal employee. The U.S. District Court for the Eastern District of Pennsylvania dismissed the suit, finding that the FTCA did not allow suits arising from the negligent transmission of mail. The U.S. Court of Appeals for the 3rd Circuit Court affirmed. The U.S. Supreme Court (the Court) reversed, holding that the scope of the FTCA exception regarding "negligent transmissions" did not cover this scenario. Considering the statute's purpose and context, the Court interpreted "negligent transmission" as only being applicable to injuries that arise out of the timeliness and adequacy of the delivery or the condition of the received mail; injuries that are primarily associated with the USPS's function of transporting mail was thus not covered by this exception. The Court reasoned that, because the FTCA exception was specifically drafted, the USPS's claim that Congress intended to retain immunity for all delivery related torts could not stand. The Court remanded the case. The opinion.
Stolt Achievement, Ltd. v. Dredge B.E. Lindholm
U.S. 5th Circuit Court of Appeals
Feb. 14, 2006 No. 04-20773
The court upheld the equal division of damages in a collision case where both vessels were at fault. In the instant case, an inbound tanker collided with an outbound dredge in the Houston Ship Channel. The trial court found both vessels to have been at fault and divided the damages equally. The tanker owner appealed, asserting that the primary cause of the collision was the steering failure on the dredge as the two vessels were about to pass. On appeal, the court held that the trial court found various faults on the part of both vessels, including regulatory violations by the tanker. The decision of the trial court was found not to be clearly erroneous. The opinion.
Horizon Lines LLC v. the United States of America & American Seafoods Co. LLC
U.S. District Court for the District of Columbia
Feb. 10, Docket number 05-0952(ESH)
Jones Act must be read literally: The U.S. District Court for the District of Columbia has determined that Customs and Border Protection rulings allowing the shipment of frozen fish from Alaska to the U.S. West Coast in foreign-flag vessels via Canadian ports and rail lines are "arbitrary, capricious and not in accordance with law" -- unless rate tariffs for such shipments are filed with the U.S. Surface Transportation Board. The court ruling means that the third proviso to Sec. 27 of the Merchant Marine Act of 1920, better known as the Jones Act, must be read literally. Although the Jones Act generally prohibits transport of goods in the coastwise trade from one U.S. port to another except on U.S.-flag vessels, an exception in the act's third proviso allows shipments on routes using Canadian ports and railroads when such routes are recognized by the STB and rate tariffs have been filed with the board. In the case at hand, Horizon Lines LLC, a U.S.-flag carrier active in Jones Act trades, sued in federal to thwart CBP's approval of a plan by Sunmar Shipping Inc., a competitor of Horizon's, to transport frozen fish from Dutch Harbor, Alaska, to Boston. Sunmar had received CBP approval to charter non-Jones Act vessels to bring fish from Alaska to Bayside, New Brunswick, a port 6 miles south of St. Stephen, New Brunswick, which is across the St. Croix River from the Calais, Maine, U.S. point of entry. Rather than proceed directly to Calais, Sunmar proposed to move the fish in a triangular pattern, first by truck and then by rail, to several towns in New Brunswick, adding 145 miles to the route prior to entry into the U.S. Sunmar did not intend to file rate tariffs for any portion of the route. CBP, in approving Sunmar's plans, had noted that subsequent to the enactment of the Jones Act's 3rd proviso, Congress had largely deregulated the rail industry and virtually eliminated required filings of tariffs. CBP thus reasoned that the rate tariff filing requirement of the 3rd proviso should be ignored, on grounds that "mechanistic adherence" to statutes requiring the filing of rate tariffs with the STB "in the present climate of deregulation would lead to an absurd result that cannot be justified." At trial, Horizon Lines argued that Sunmar's proposed route was "commercially pointless" and in violation of the Jones Act's third proviso. U.S. District Judge Ellen Segal Huvelle ruled that CBP had gone too far in expanding the third proviso of the Jones Act "to permit a non-coastwise-qualified private shipper to engage in noncontiguous domestic trade without filing a rate tariff with the Surface Transportation Board. This interpretation ignores both the plain language of the (Jones Act) and the congressional intent in enacting it." "It is within the authority of Congress," Huvelle added, "to expand the scope" of the third proviso. "The fact that certain foreign vessels wish to take advantage of the proviso -- yet are unable to -- is the concern of the legislature and not the agency," meaning CBP, Huvelle noted in her ruling. She ordered the case be sent back to CBP "for further proceedings not inconsistent with this opinion." The opinion.
Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News, Lloyds & other world sources.
The Cargo Letter Correspondents:
Michael S. McDaniel Esq, Editor (Countryman & McDaniel)
David Schuchman -- Interpool Corp. -- Webmaster of The Cargo Letter Archive
Libby Thompson (Countryman & McDaniel)
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