Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
29 Jan. 2008
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 is what happened in our industry during January 2008!
Last week a United Nations Commission on Int'l Trade Law (UNCITRAL) working group meeting in Vienna adopted a draft convention on contracts for the Int'l carriage of goods wholly or partly by sea. This could change the way that all ocean cargo claims are handled in the future -- and your insurance premiums. See World Ocean News.
In three weeks the Law Offices of Countryman & McDaniel will be the first to present a "top to bottom" training course in Asia for understanding the theory & science of cargo loss, cargo claims handling, loss prevention & Post 911 cargo security. Our courses begin in Singapore & Kuala Lumpur from Feb. 18 to 22, 2008. While The Cargo Letter has sponsored these classes for many groups over the years -- our model will now be presented by the Asia Business Forum. The schedule for our U.S. & UK presentations will be announced. See EVENTS.
Chinese Lunar New Year Holiday ........... as in observance of the upcoming Chinese Lunar New Year, most factories & offices in mainland China and Hong Kong will be closed from Feb. 6th to Feb. 12th, 2008.
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.The Cargo Letter Archives of Past IssuesMichael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker/trade consultant attorneys at LAX.
INDEX to The Cargo Letter:
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs ______________
2. The Cargo Letter Financial Page ______________
OUR "B" Section: FF World Ocean News***
3. Freight Forwarder World Air Briefs ____________
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs _____________________
5. The Cargo Letter Cargo Damage Dispatches _____
**Back By Popular Demand**
OUR "D" Section: FF in Cyberspace***
6. The Cargo Letter "Cyber Ports of Call" _________
OUR "E" Section: The Forwarder/Broker World***
7. New Transport Related Legal Cases ___________
Back To Main Page
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs _____________
***Number Two May Get A Boost ...... as Deutsche Post AG may sell its DHL Americas unit to FedEx Corp., according to a German newspaper, Bloomberg reported Jan. 25. The Financial Times Deutschland said Deutsche Post may sell the U.S. operation to FedEx and seek a merger partner for its Deutsche Postbank unit later this year, the newspaper reported, citing unidentified company officials, Bloomberg reported. Bloomberg quoted an analyst with UBS Securities who said the move "conceptually makes sense" for FedEx. FedEx has 29% of the U.S. package-shipping market, trailing UPS Inc. 52%, and would add about 6.6% by buying DHL, according to 2006 figures from SJ Consulting Group, Bloomberg said. UPDATE >> At press time Deutsche Post said has no intention of abandoning the U.S. express delivery market, a DHL USA spokesman said.
***China Is On Fire ....... as the economy has expanded by 11.4% over the past year, reaching its fastest growth rate in 13 years, officials have announced. Increased exports and a boom in the construction industry helped the rapid expansion during 2007. But officials warned that overheating remained a danger, despite a slight slow-down in the 4th quarter. Inflation is also a serious concern, with many Chinese people hit by recent dramatic increases in food prices. It took 6 interest rate rises by the government last year to slow the expansion. The last quarter of 2007 saw growth ease to 11.2%. According to the estimates of the China Federation of Logistics & Purchasing (CFLP), in 2007 China's total logistics flow in 2007 grew 25.5% to RMB74.8 trillion (US$10.27 trillion).
***America -- Cuba's #1 Supplier? ....... as despite a 50-year-old trade embargo, Cuban government officials reported Jan. 23 the U.S. remained the top supplier of food & farm products to Cuba for the 5th year in a row, selling more than US$600M worth of agricultural exports -- wheat, chicken & soy are among the leaders -- to the communist nation in 2007. In 2007 Cuba imported roughly the same amount of agricultural products from the U.S. as it did in 2006, said Pedro Alvarez, head of Cuban food importer Alimport. However, rising transportation & production costs forced the island nation to spend US$30M more in 2007 than the US$570M it did in 2006. Nearly 1,600 types of agricultural products are shipped to Cuba from firms in 35 U.S. states.
***Arab-American Relations Soar ...... as a report released in Jan. from the U.S.-U.A.E. Business Council said the value of U.S. goods exported to the United Arab Emirates increased 352% from US$2.6Bn in 2001 to US$11.9Bn in 2006. This is far greater than the 42% increase for overall U.S. exports around the world," the report said.. Among the specific examples of two-way trade between the countries, the report noted the Abu Dhabi Investment Authority's US$7.5Bn infusion in the Citibank, and Emirates Airlines' US$3.2Bn order of Boeing planes. Read the report:
***NAFTA Vegi Bonanza ...... as Canada & Mexico are the No. 1 & No. 2 export markets, respectively, for U.S. agriculture, the U.S. Dept. of Agriculture said. In fiscal year 2007, two-way agricultural trade between the U.S. and Mexico was valued at a record US$22.2Bn, a nearly fourfold increase over fiscal year 1993 -- the year preceding implementation of NAFTA. In fiscal 2008, USDA predicts two-way trade will continue to increase to US$24Bn, an 8% increase. Since 2005, the United States has invested almost US$20M in programs & technical exchanges to help Mexican agricultural producers address production, distribution and marketing-related challenges.
***U.S. Export-Import Bank Warning ....... as it has adopted "know-your-customer" guidelines to help both the bank and its export customers to ensure creditworthy and legitimate transactions. Ex-Im Bank was chartered by Congress in 1935 and finances export transactions considered too risky for commercial banks. In fiscal year 2007, the bank authorized US$12.6Bn in loans, guarantees and export credit insurance to support about US$16Bn of U.S. exports. Protect yourself -- learn the Due-Diligence-Guidelines.
***U.S. Export Reporting Dispute Solved ..... as the U.S. Census Bureau and Dept. of Homeland Security finally have resolved their 30-month standoff over proposed rules requiring electronic filing of export documentation, according to a Census official. The proposed rules for mandatory use of the agency's Automated Export System (AES) will be published soon in the Federal Register. The new AES regulations will require exporters to file SEDs a certain number of hours prior to departure, depending on mode. The time frames are 24 hours prior to lading for vessel shipments, 4 hours before wheels up for air shipments (with exceptions for nearby countries), 2 hours for rail and 1 hour for truck (or 30 minutes for pre-certified secure carriers). The rule will go into effect 30 days after it is published in the Federal Register and be implemented within 90 days.
***Alaska Imports Must Go E ...... as the U.S. Customs & Border Protection (Customs, CBP) has announced that beginning Feb. 11, 2008, truck carriers will be required to electronically submit cargo manifests & carrier information via CBP's Automated Commercial Environment (ACE) prior to arrival at Alaska land border ports. With implementation in Alaska, truck e-manifests will be mandatory in all 99 U.S. land border ports of entry, completing nationwide implementation of the program. Beginning no earlier than May 11, 2008, however, CBP will refuse entry to any truck that has not successfully transmitted an e-manifest prior to arrival at the port. Monetary penalties of up to US$10,000 may also be issued
***Civil Class Action Against Major Forwarders ...... as a lawsuit alleging anticompetitive behavior has been filed by several businesses against a group of freight forwarders in U.S. District Court in Brooklyn, N.Y. Precision Associates, James Barners, and Anything Goes LLC have named Panalpina, Kuehne + Nagel, Expeditors International of Washington, Eagle Global Logistics (EGL), Schenker, Deutsche Post/DHL, UTI Worldwide as defendants. Also named is Spedlogswiss, the Swiss Freight Forwarding and Logistics Assn. The brokerage firm Bear Steans said the suit is "presumably around fuel surcharges. "This suit is not surprising given the prior announced Department of Justice investigation and current class action suits against the rails and several LTL (less-than-truckload) providers over fuel surcharges," said the firm in a research note this morning. "We believe it's not a material event." Bear Steans said.
***Banner Year For U.S. Trucks ...... as the U.S. trucking industry in 2006 hauled more goods than ever before in a single year, the American Trucking Assns. reported. The trucking industry hauled 69% of the total volume of freight transported in the U.S.in 2006. This equates to an all-time high carrying load of 10.7 billion tons, and US$645.6Bn in revenue, representing 83.8% of the nation's freight bill.
***No Country For Old Trucks ...... as Transport for London has introduced a 28-day grace period for freight companies to make their fleets compliant with a new emission standards scheme for vehicles moving in and out of Greater London. The Low Emission Zone, due to come into effect on Feb. 4, will include daily charges for older, more polluting heavy goods vehicles that are below Euro 3 emission standards. Any non-compliant vehicle entering the zone will, rather than getting a penalty charge notice, instead receive a warning letter giving the vehicle keeper 28 days to make the vehicle compliant.
***Smart Money ON The Rail? ...... as Warren Buffett's company has added to its stake in Burlington Northern Santa Fe. The billionaire's Berkshire Hathaway now owns 17.8% of the nation's second-largest railroad after buying 948,800 more shares on 15 & 16 Jan., according to documents filed with the Securities & Exchange Commission Jan. 17. Berkshire reported purchases of BNSF stock three times this month, and the Omaha-based holding company now owns 62.5 million shares of stock in the Fort Worth, Texas-based railroad. The latest filings say Berkshire paid between US$77.69 and US$78.18 for the BNSF shares this week.
***A Tea Ceremony On The Streets of Laredo ...... as NYK Logistics (Americas) Inc. has acquired Laredo, Texas-based customs brokerage, freight forwarding, warehouse & distribution services company Bruni International. Financial details were not disclosed. Bruni International was founded as a sole proprietorship in May 1982 by E M. "Rocky" Bruni who joins NYK Logistics as a Sr. VP in the int'l services group.
***Wal-Mart Serious About RFID ...... as it has sent letters to suppliers to its Sam's Club division laying out a timeline for vendor RFID tagging to support its plans for pallet and location management, as well as, ultimately, item-level tagging. The plan, outlined in a letter dated Jan. 7, 2008, projects a two-and-a-half year schedule to get to full "selling unit" level tagging across the entire chain, and will for the first time actually impose penalties, generally referred to as "vendor chargebacks," for suppliers that fail to meet the new requirements. Until now, the RFID compliance program at Wal-Mart, which has substantially changed its direction in the past few months, did not have any direct penalties associated with the mandates.
***Belarussia Customs Takes Wing ...... as border guards in Belarus have foiled an attempt to smuggle 277 parrots into the ex-Soviet state -- aboard a bicycle. A spokesman said the smuggler abandoned his bicycle and cargo -- contained in 6 cages -- and fled back over the border into Ukraine when confronted late on Jan. 22 at the crossing point of Dubki. "The cages were fixed to an ordinary bicycle. The parrots were stuffed inside like sardines, 40 to 50 to a cage," he said. "You can imagine what it was like. This was sheer barbarism. Those poor birds." Two birds had died while the others were kept overnight at the border post. They were then handed over to veterinary inspectors with the eventual aim of offering them to pet shops in the country of 10 million wedged between Russia and three European Union members. Belarussian border guards last year detained a 19-year-old Russian who was trying to dig his way under the border into Poland using nothing more than a mug. Yes, when captured authorities gave him a mugshot.
***Little Hugs For Arizona ...... as almost 500 pounds of marijuana packaged in "Little Hugs" juice boxes were seized from a truck Jan. 14 iat Union Hills, Arizona. At about 7:30 pm, a DPS officer stopped a semitractor-trailer rig for an equipment violation, according to the Arizona Dept. of Public Safety. During a search of the truck, the police officer discovered 4 pallets of the marijuana-filled juice boxes. The 471 pounds of marijuana has an estimated street value of US$250,000, according to police. The driver of the truck, Keith Bailey, 33, was headed from Phoenix to New York State, according to police. He was arrested & booked into the Maricopa County jail. Packaging the marijuana in juice boxes was unique, according to Sgt. Bart Massey of the Arizona Dept. of Public Safety Commercial Vehicle Enforcement Bureau. "It looks like they put a lot of work into this," Massey said in a statement.
***Heads Up! ..... as a drunken Australian man who took a nap between railway tracks has had a miraculous escape after he was run over by a freight train and received only minor injuries and a bump on the head. The 20-year-old, whose name was not released, fell asleep at a level crossing at Port Augusta, in South Australia state, when the train approached about 3.40 a.m., newspapers said on Jan. 11. The driver saw the man & slammed on the emergency brake, but the train, carrying 3000 tons of freight, was unable to stop in time and rolled over him, halting only after it had passed. The General Manager of the train company, Tony Aldridge, said railway tracks were "not the best place" to take a nap. "It was probably lucky he was lying in such a way that the train actually went over him rather than across him," he told The Australian newspaper, adding that the clearance under the train was only 30cm (11 inches). The man was taken to Port Augusta hospital with minor injuries. He apparently hit his head on the train while trying to sit up.
2. The Cargo Letter Financial Page ___
**Canadian National Railway Co. UP with 4th quarter net income of US$850M, up 66.9% over the same period in 2006.
**CSX Corp. UP as 4th quarter 2007 net income of US$365M, up 5.2% from $347M in the same period in 2006.
**Knight Transportation's. DOWN as 4th-quarter profit fell to US$13.8M, or 16 cents a share, from US $18.9M, or 23 cents, a year ago.
**Norfolk Southern Corp. UP with a 4th quarter net income of US$399M, a 3.6% increase compared with US$385M for the same quarter in 2006.
**Orient Overseas (International) Ltd.(parent of ocean carrier OOCL) UP as 4th quarter 2007 revenue increased 27% to US$1.40Bn from US$1.10Bn a year earlier. Average revenue per TEU was up 10.7% as the carrier's global volumes increased 14.8% to 1.19 million TEUs.
**Southwest Airlines UP as net income for 4th quarter 2007 was US$111M, or US$00.15 per diluted share, compared to US$57M, or US$.07 per diluted share, for 4th quarter 2006.
**Union Pacific Corp. UP as 4th-quarter 2007 net income rose to US$491M, or US$1.86 per share, from US$485M, or US$1.78, a year earlier.
**USA Truck. DOWN as it lost US$1.6M in 4th quarter 2007.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ___
***Major U.S. Airline Consolidation Rumored ..... as Delta Air Lines is moving ahead with merger talks with United Airlines and Northwest Airlines, say people close to the carriers, raising the odds that the U.S. airline industry could finally be headed for consolidation. The merger discussions, undertaken with the blessings of Delta's board, were first reported by the Wall Street Journal. Combining two airlines and their global route networks and disparate labor groups is incredibly complex, time-consuming and difficult to pull off, industry observers say.
***World Air Industry Sluggish ...... as the Int'l Air Transport Assn. said freight traffic growth was sluggish through the first 11 months of 2007. International freight was up 3.5 % in November, compared to an average of 3.9% in Jan.-Nov., and below the 4.8% recorded over the same period in 2006. Meanwhile, international passenger traffic grew 9.3% in Nov., the fastest growth rate in 18 months, and faster than the average 7.5% in the first 11 months of the year.
***UPS Takes Major Airfreight Jump Ahead ..... as it said Jan. 7 it is expanding an Int'l air-freight service that guarantees delivery dates, as it leans more on global operations. The service will be available to 3 times as many cities as before, a company spokeswoman told Bloomberg News. UPS Express Freight provides guaranteed time-definite, overnight-to-three day door-to-door delivery including routine customs clearance to major global metropolitan areas, says UPS. As part of a reconfigured air service offering, UPS said it would also offer two non-guaranteed alternatives. Air Freight Direct is a 1- to 3-day airport-to-airport service. UPS Air Freight Consolidated is a 3- to 5-day airport-to-airport service. Both are available worldwide with pick up, delivery, and customs clearance as optional features. Freight shipments could move on UPS or 3rd-party aircraft, the company said.
***Boeing 787 Hampered By Supply Chain ....... as it has announced that the rollout of its first 787 jet will be delayed until the end of the 2nd quarter, citing ongoing problems with deliveries from parts suppliers. The plane was originally due for its first flight at the end of the 1st quarter. Air India said it wants compensation from Boeing over delays in production of the 787 Dreamliner.
***American Air Understaffed? ...... as the Allied Pilots Assn., collective bargaining agent for the 12,000 pilots of American Airlines (NYSE: AMR), cited over-zealous cost cutting by management as the reason for recently announced February flight cancellations by the carrier. "Time and again, the evidence has pointed to a pilot shortage at American Airlines," said APA. More than 2,200 American Airlines pilots remain on furlough. The Allied Pilots Assn. is the largest independent pilot union in the U.S.
***Eyes ON The Prize ....... as a "lock-up" clause in a deal between China Eastern Airlines' board and Singapore Airlines parent Temasek Holdings will prevent Air China from acquiring a stake in CEA until Aug. 2008. News outlets reported that China Eastern, which is looking to sell nearly a quarter of its business, won't be able to sell to Air China parent China National Aviation, despite the fact that CNA has outbid Singapore for the Shanghai-based airline.
***Atlanta Retains America's Crown ...... as the U.S. Federal Aviation Administration said Hartsfield-Jackson Atlanta Int'l Airport has retained its title as the nation's busiest airport for the 3rd consecutive year.
***Japan Airlines Mulls Cargo Bailout ..... as it is considering selling a 50% stake in its cargo business as it seeks to improve a faltering bottom line hit by rising oil & labor prices. Japanese and Int'l media outlets reported this week that JAL is also looking to raise US$1.3Bn from creditors & business partners. The sale of its cargo business could net as much as double that amount. A Reuters report suggested that JAL has been passed by Japanese rival All Nippon Airways because ANA has employed a strategy of using smaller, more fuel efficient planes in recent years.
***Polar Air Cargo Worldwide Expand Japan Market ...... as it will begin service to Japan, from Chicago, starting Feb. 21. The service will be to Osaka's Kansai Int'l Airport from O'Hare Int'l Airport, and will operate 5 times a week, said Polar, a unit of Atlas Air Worldwide Holdings.
***Secret Air Factory Resort ....... as China is to create a tourist resort in a giant cave used by the former Nationalist government as a secret aircraft factory during World War Two, the official Xinhua news agency reported. The Haikong cave, in verdant mountains near the southwestern city and wartime capital of Chongqing, will cost about US$68M to develop, the report said. The cave is "an ideal place for conferences and leisure travel," it said. "The enshrouded cave is 50 meters (164 ft) high and as spacious as a giant conference hall -- extends for 47,000 square feet," Xinhua added. "The tourist bureau said that the manufacturing plant could be developed into a loft art workshop." The plant was deserted in 1949, the report said, after the Nationalists fled to Taiwan after losing a brutal civil war with the Communists.
***Snail Mail -- It's Official ....... as postal delivery is as slow as snails, at least in Poland. An IT worker, after receiving a letter on Jan. 3 that was sent on Dec. 20 as priority mail, calculated that a snail would have made it even faster to his home than the letter. Daily Gazeta Wyborcza said Michal Szybalski calculated that it took 294 hours for the letter to arrive at his home. He also said the distance between his home and the sender was 11.1 kms. Given the distance and the time, the speed of the letter was 0.03775 kms per hour. Szybalski calculated that a garden snail travels at around 0.048 kilometers per hour.
***Thai Airways May Not Welcome Mexican Air Hostesses ....... as the producer of a sexy Thai soap opera about young air hostesses promised longer skirts and fewer catfights after real flight attendants complained the show was sexist & should be yanked from the airwaves. The makers of "The War of Angels", which portrays stewardesses fighting for the attention of male pilots at a fictional airline, apologised to staff at national carrier Thai Airways who said the show was demeaning. Airline staffers had complained that the fictional flight attendants wore a too-revealing skirt cut above the knee with a front slit. The airline's union complained to the Culture Ministry on Tuesday that the prime time show, which has a PG-13 rating, insulted its members and demanded the show be dropped from an army-run television channel. "Such distortions could mislead society, especially youths, to misunderstand or hate people in this profession in every airline, including Thai Airways," acting union president Somsak Srinual said in a statement.
***Air New Zealand Goes Pink .... it has announced that Emmy-award winner Kathy Griffin will be the official "Hostess" for the airline's first North American "Pink Flight," which is flying in celebration to the 2008 Sydney Gay and Lesbian Mardi Gras. Departing on a Boeing 777 from San Francisco Int'l Airport (SFO) on Feb. 26, 2008, Griffin will perform a stand-up act and mingle with drag queens and partygoers during the 14-hour-flight that will be filmed as part of Bravo's hit-show, "Kathy Griffin: My Life on the D-List." Kathy will mingle with Pink passengers at the SFO gate before officially greeting them on board. Pink Flight flyers will be treated to Kathy's stand-up comedy in the air, as well as more informal interactions between Kathy and the infamous drag queens from down under led by Buckwheat, who will also be performing on the flight. Air New Zealand says that "Glamorous gays (and any other fun-loving friends) are invited to purchase tickets. Seats start from US$1198. As part of the flight, passengers are invited to a pre-flight party at the gate, the party on board and a partier greeting in Sydney. Pink Passengers are encouraged to show up at the airport ready to party. They include a message from Buckwheat.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs _____________
***"COGSA '98" Evolves Into Proposed New Convention ...... as a United Nations Commission on Int'l Trade Law (UNCITRAL) working group meeting in Vienna last week adopted a draft convention on contracts for the Int'l carriage of goods wholly or partly by sea. The working group has been meeting periodically since April 2002 to prepare a new treaty aimed at creating what UNCITRAL said would be "a modern and uniform law concerning the international carriage of goods which include an Int'l sea leg, but which is not limited to port-to-port carriage of goods." UNCITRAL said, "In addition to providing for modern door-to-door container transport, there are many innovative features contained in the draft convention, including provisions allowing for electronic transport records, and other more technical features to fill the perceived gaps in existing transport regimes. The proposed convention will be circulated to governments for comment and will be presented to the annual session of UNCITRAL when it meets later this year in New York from June 16 to July 3. If a final round of negotiations there are successful, it will be presented to the UN's General Assembly later in 2008, and then have to approved by individual countries. The proposed convention has higher package liability limits than those provided under the Hague Rules, on which the U.S. law, the U.S. Carriage of Goods at Sea Act (COGSA), is based. Most countries use a different regime called the Hague-Visby rules; a smaller group uses what are called the Hamburg Rules. The National Industrial Transportation League (NIT League)notes that package limitations are pegged to the Int'l Monetary Fund's unit of value, Special Drawing Rights. SDR's fluctuate like world currencies, and the NIT League said the current COGSA per package limit translates into about US$550. Under the proposed draft convention, the per package limit for loss or damage would increase to 875 SDRs. At today's exchange rate that's about US$1,385. On the basis of weight the proposed limit is 3 SDR per kilogram or about US$4.75 at today's rate. The UNCITRAL effort all began 10 years ago -- when it was called "COGSA 1998" -- a product of the Maritime Law Association of The United States (MLA). Many changes have been made to the proposal since 1998, including "opt out" provisions which allow large logistics operators to bypass the "teeth" of UNCITRAL, to the possible detriment of smaller forwarders. We will have more to say on this subject.
***U.S. Ports Slump Passes ...... as the National Retail Federation & Global Insight reported that container freight volumes moving through U.S. retail container ports rose above previous-year levels in Dec. 2007 for the first time in 4 months. "Month-to-month numbers are declining as we head into the winter slow season," said Jonathan Gold, VP of the National Retail Federation (NRF). "But we're starting to see increases again when year-to-year numbers are compared." Ports were operating without congestion, added Paul Bingham, an economist at Global Insight. "Rail performance measures continued to be adequate in December. Intermodal rail operations are also performing adequately and are expected to continue to do so over the next six months," he continued. Ports surveyed handled 1.38 million twenty-foot-equivalent units (TEUs) in November, the most recent month for which full data is available. That figure was 4.4% below October's 1.44 million TEUs and 2.2% off Nov. 2006 levels. November, therefore, was the 4th month in a row to show year-on-year monthly volume declines. Dec. was estimated at 1.35 million TEUs, up 3.3% from the same period in 2006 but down from Nov. 2007 levels. This was the 1st monthly increase in year-on-year volumes since July 2007. Jan. 2008 is forecast to reach 1.31 million TEUs, 1.8% ahead of the prior year.
***But Southern California Still Lags ...... as 2007 container volumes through the ports of Long Beach & Los Angeles declined for the 1st time in two decades, mirroring a national economic malaise sparked by the implosion of the U.S. housing market and an Int'l credit crunch. Despite the relatively minor 0.6% decline over 2006 volume, the two adjacent ports remained the busiest port complex in the Western Hemisphere, moving a combined 15.7 million TEUs in 2007. The Long Beach port fared slightly better than its neighboring counterpart, reporting a 0.3% increase over 2006 TEU volumes, while Los Angeles saw a 1.36% decline from the year-ago period. The ports' volumes have also led to lack of job growth in the Southern California transportation industry, a system heavily dependent on the movement of imported goods. According to a study commissioned by the two ports last year, nearly 50,000 jobs in Southern California are directly related to the port complex. Some years ago The Cargo Letter warned that escalating union wages & port charges would only serve to boost expansion of competing West Coast Ports and the new rise of U.S. East Cost ports as it would become cheaper to transit the Panama Canal to meet East Coast needs. This all comes as no surprise.
***Adding To The Southern California Burden ..... as port officials have approved a US$15-per-TEU tax on all containers moving in and out of the ports of Long Beach & Los Angeles, in an effort to defer the cost of port expansion. The seven-year tax, set to take effect Jan. 1, 2009, is projected to generate about US$1.4Bn to pay for expanded road, rail and bridge projects at the two ports.
***Proposed U.S. Manifest Rule ...... as U.S. Customs and Border Protection's (CBP, Customs) recently published Notice of Proposed Rulemaking (NPRM) regarding advanced security filing requirements includes a section titled "Proposed Carrier Requirements Relating to Vessel Cargo Destined to the United States." Under the proposed regulations, CBP would require vessel carriers destined for the U.S. to submit a vessel stow plan showing information about the physical location of cargo aboard the vessel, and container status messages regarding certain events relating to containers on board. The vessel stow plan, which could be submitted via the Automated Manifest System (AMS), must be received by CBP no later than 48 hours after departure from the last foreign port, the NPRM stated. For voyages less than 48 hours, the stow plan must be submitted before departure. Vessels exclusively carrying bulk cargo would be exempt from the vessel stow plan submission requirement. Full text of the NPRM, including instructions for submitting comments at: http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/E7-25306.htm
***APL & Hapag-Lloyd To Merge?...... as Singapore-based Neptune Orient Line and Germany's TUI AG have denied speculation that they are in talks to merge their respective container line subsidiaries APL and Hapag-Lloyd. French newspaper La Tribune, citing an unnamed source said to be close to TUI shareholders, had reported that Michael Frenzel, CEO of TUI had made several trips to Singapore recently to negotiate a merger with NOL Group President and CEO Thomas Held. A joint Hapag-Lloyd/APL entity would just overtake CMA CGM as the world's third-largest carrier with a combined fleet of nearly 900,000 TEUs and an order book of about 367,000 TEUs, according to the latest statistics provided by AXS-Alphaliner.
***UK Surcharge Ends? ..... as the British Int'l Freight Assn. said Jan. 23 it "cautiously welcomes" the Far Eastern Freight Conference's decision to suspend the controversial US$145-per-TEU congestion surcharge on westbound cargo from Asia to the UK that was introduced in Dec. 2007.
***Dubai Ports World Moves Ahead ...... as it handled 43.3 million TEUs across its global portfolio of 42 terminals in 2007, up 18% against 36.8 million TEUs in 2006. The terminal operator saw strong growth across all three of its regions with the Middle East, Europe and Africa region increasing 19% to 20.3 million TEUs. Within that reporting region, the company's two Dubai ports of Jebel Ali & Port Rashid saw combined growth of 20% to reach 10.7 million TEUs. DP World Jebel Ali alone gained 25% to reach 9.9 million TEUs helped by the opening of a new second terminal in the 2nd half of the year. The Asia Pacific and Indian Subcontinent region recorded a 17% increase to 18.3 million TEUs while the Americas & Australia region delivered growth of 18 percent to 4.7 million TEUs.
***YouShip ..... as the Maersk affiliate online site through which shippers can directly book cargo ran a publicity drive this month in which it offered shippers freight rates for as little as US$1 as part of its "Week of Fortune" promotion. Next week --"High Cube Happy Hour." Really!
***Skysail Takes The Past To The Future ...... as the Motor/Wind combi vessel, M/V Beluga SkySails was christened in December 2007. The unique ship uses a combination of traditional motor propulsion augmented with a giant para sail for additional wind powered thrust. Ships using the SkySails system can experience savings in fuel use from 10 to 35%. The Beluga Shipping-owned M/V Beluga SkySails, the world's first cargo vessel with an innovative towing kite system, is being used for commercial transport for the first time. It will carry the first part of a complete particleboard factory across the Atlantic from Bremen in Germany to Venezuela on behalf of DHL Global Forwarding, the ocean and airfreight arm of the Deutsche Post World Net Group. Once the diesel-powered ship is out at sea, it will unfurl an especially designed flying sail to supplement its engines with wind power. A computer will adjust the height and the angle of the sail, developed over a period of 4 years by Hamburg-based SkySails.
***U.S. Cadets Under Foreign Flags ..... as container line APL has signed an agreement with the U.S. Maritime Administration to train for the first time ever U.S. maritime academy cadets on container vessels trading internationally. Cadets from the U.S. Merchant Marine Academy at Kings Point, N.Y., and all 6 state maritime academies will be able to learn and work on board vessels operated by APL, the U.S. Dept. of Transportation and the carrier announced.
***Port of Los Angeles Meets The Flywheel ...... as officials have approved the purchase of a high-tech system to cut fuel use & reduce emissions from rubber-tired gantry (RTG) cranes at three port terminals. The REGEN system, manufactured by California based Vycon, utilizes a flywheel system to recapture electrical power generated by the cranes' diesel engines during the lifting of containers. This generated power is normally dissipated while the crane operator lowers a container or brakes the crane mechanism. The Vycon system shunts this previously lost electrical power to a storage system that utilizes a high-mass flywheel that rotates in a vacuum chamber on near frictionless magnetic bearings. The power is stored as long as the flywheel continues to spin and can be redirected back to the crane's main lifting motors, reducing the amount needed to be generated by the RTG's diesel engines. According to Vycon, the system significantly reduces the load to an equipped crane's diesel generator, thereby cutting fuel consumption by up to 25 % and reducing diesel emissions by more than half. Vycon has installed numerous flywheel system in ports throughout the world, from the United Kingdom to Hong Kong. Watch the movie.
***Can Riots ....... as Maersk Container Industry's factory in Dongguan, southern China, had to be shut down last week after hundreds of workers rioted after a colleague was beaten by security guards for jumping a waiting line in the canteen. According to a report by Radio Free Asia, migrant worker Zhao Hongwei was attacked after he refused to pay a fine of 200 yuan for jumping the barrier at lunchtime. Zhao, who was taken to a hospital by police along with an injured security guard, said the workers had been angry with management for a long time over pay cuts, longer hours and demands for greater productivity. Local reports suggested that the security guards' office living quarters were set on fire. The riot lasted into the early hours of Jan. 22 morning.
***Container Shake Up ...... as Fortress Investment Group plans to raise around US$290M through the sale of an 18 percent stake in Seacastle Inc., which will buy & lease chassis, containers and containerships. Seacastle was formed in June 2007 for the purpose of combining under a single holding company the refrigerated container and related equipment-leasing business operated by Container Leasing Int'l, which did business as Carlisle Leasing Int'l, with the containership leasing business that Seacastle had started. Seacastle then acquired the leasing company Interpool in July 2007. Seacastle owns or manages 247,000 intermodal chassis, 985,000 TEUs of dry freight and refrigerated shipping containers and seven containerships with aggregate capacity of 32,770 TEUs. Its ships are chartered to APL, CSAV, and Mediterranean Shipping Co. Interpool had been the valued corporate sponsor of The Cargo Letter for 12 years. Who will be the next corporate sponsor of The Cargo Letter?
***Savi Networks Seems to Work .... as it has now recorded the 25,000th commercial cargo shipment tagged with standards-based electronic seals (e-Seals) moving through its global wireless network, which is set up at port facilities handling 20 percent of world trade. The SaviTrak(TM) information service monitors in real-time the location & security status of commercial cargo shipments. SaviTrak(TM) customers in Asia & South America are discovering that the real-time data the system captures from shipments tagged with active Radio Frequency Identification (RFID) e-Seals enhances security visibility, speeds clearance by their countries' Customs authorities, and reduces in-transit inventory costs.
***Throughput >>> Port of Ashdod reported a 17% increase in the number of TEU moved through the port in 2007 compared to 2006.--TEU 808,697 -- in total, the port handled 16.2 million tons of cargo, up 7.2% compared to the previous year. >>> Port of Boston set records last year for container cargo shipments in 2007 with 220,341 TEUs and total tonnage was 1.7 million short tons. >>> COSCO Pacific, the terminal operating arm of China's COSCO Group, saw its global throughput rise 30.9% in Dec. to 3.9 million TEUs, which is an improvement from 3 million TEUs handled in the same month in 2006.>>> Container throughput at Marseilles-Fos in 2007 handled 1 million TEUs in 2007, the first time the French port has passed that milestone.
***This Month In U.S. Navy History ........
1911 - First aircraft landing aboard a ship, USS Pennsylvania (ACR 4) by Eugene Ely
1942 - USS Gudgeon is the first U.S. sub to sink an enemy submarine in action, Japanese I-173.
1945 - Commissioning of USS Higbee (DD 806), the first U.S. Navy ship named after a woman member of the U.S. Navy.
1954 - USS Nautilus (SSN 571), the first nuclear-powered submarine, is commissioned at Groton, Conn. After setting sail, it sends the message: "Underway on nuclear power."
1962 - After a flash fire in the Persian Gulf burned a crewman on the Danish tanker M/T Prima Maersk, USS Duxbury Bay (AVP 38) transfers a Navy doctor to help the crewman. USS Soley (DD 707) took him to the nearest hospital at Bahrain Island.
1967 - Fire in a command module at Cape Kennedy during simulation countdown. Lunar module pilot Lt. Cmdr. Roger B. Chaffee & 2 other crew died.
1968 - USS Pueblo (AGER 2) is seized by North Korean forces in the Sea of Japan.
1991 - Helicopters from USS Leftwich (DD 984) & USS Nicholas (FFG 47) recapture the first Kuwaiti territory from Iraqi forces.
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 Jan. 2008: "The One That Almost Got Away" - M/V Jeppesen Maersk
You Tube feature: "Container Gantry Gone"
See our newest photo feature "Singles Only" - Transportation Disasters Told In A Single Photo!
U.S. Congress Hearing On M/V COSCO Busan Collision With Oakland Bay Bridge -- Nov. 19 2007
Testimony of Rear Admiral Craig Bone, USCG
Testimony of Capt. Thomas Hand
Statement from Admiral Thad Allen, Commandant USCG
NOTE: The historic dangers of carriage by sea continue to be quite real. Shippers must be encouraged to purchase high quality marine cargo insurance from their freight forwarder or customs broker. It's dangerous out there.
OUR "D" Section: FF in Cyberspace***
6. The Cargo Letter "Cyber Ports Of Call"___
Here are our suggested world wide web sites of the week for your business, your information and your amusement..............
Cargo & Trade>>>>>>
10 Strategies to Drive Down Your Transportation Spend
Canadian Trade & Investment
Colombia Trade News
Colombian American Chamber of Commerce
EU Business Dirctory
FAA Flight Delay Information
Int'l Marine Accident Reporting Scheme
Int'l Risk Management Institute
Lloyd's List London Awards 2008
Manufacturers: Global Sources Online
Netherlands Foreign Investment Agency
New Emergency Response Guidebook ...... guidance for handling emergencies dealing with hazardous materials.
Snapshot of Asian Countries
The Arbitrator .... American Society of Marine Arbitrators Inc webzine
Transport Statistics for Great Britain (TSGB)
U.S. Customs - Foreign Assembly of U.S. Components
U.S. Customs -- Importing Works of Art, Collector's Pieces, Antiques & Other Cultural Property
U.S. Customs Proposes "Last Sale" Interpretation of Transaction Value
U.S. Customs Publication - "Intellectual Property Rights (IPR): Technical Information for Pre-Assessment Survey (TIPS)."
U.S. Customs' Quota Book Transmittals (QBTs)
U.S. Customs Valuation Encyclopedia (1980 - 2003)
U.S. States Renamed For Countries With Similar GDPs
U.S. Tax Information For Int'l Businesses
FleetMentor ....... J. J. Keller has just gone live with its new online fleet management tool,
Philo Freight World Directory
Simple Tool for Calculation of Arrival Dates & Delivering Durations?
Traffic.com2GO For Your Phone \
Trade Shows, Exhibitions, Conferences & Business Events Worldwide
World Trade Organization Events
1st Journal of Commerce Container Transport Investment Conference ....... Jan. 14-15, 2008 in New York City
2007 ATA Management Conference & Exhibition ...... 20-23 Oct. 2007. Orlando, FLA.
2nd Air Cargo India Conf. & Exhibit .... 23-25 Jan. 2008, World Trade Center, Mumbai
2nd Annual Int'l Logistics & Transportation Conference & Exhibition ..... Feb. 28-29th, 2008 Airport City, Lod, Israel
5th Vietnam Int'l Trade Fair ...... 4-8 Dec.. 2007, Ho Chi Minh City Int'l Exhibition & Convention Center
Advanced Technologies for Airport Security (ATAS) Conference ......... Feb. 6 & 7, 2008, Tyson's Corner Marriott, Vienna, VA
Air Cargo India 2008 Int'l .... 23-25 Jan. 2008, World Trade Center, Mumbai
Cargo Claims Handling & Port Security Seminar - Countryman & McDaniel - The Asia Business Forum...... 18-19 Feb. 2008, JW Mariott, Singapore
Cargo Claims Handling & Loss Port Security Seminar - Countryman & McDaniel - The Asia Business Forum ...... 20-21, 2008, Kuala Lumpur. Malaysia
China Transpo ........ April 24-26th, 2008 in Beijing Exhibition Center
Customs-Trade Partnership Against Terrorism (C-TPAT) Seminar ........Feb. 26 to Feb. 29, 2008 in New Orleans, Louisiana.
Europort Maritime 2007 .....6-9 Nov. 2007, Rotterdam Netherlands
Intermodal 2007 .... 4-6 Dec. 2007, Amsterdam Netherlands
Int'l Congress of Maritime Arbitrators ......5 - 9 Oct. 2009, Empire Riverside Hotel, Hamburg
MARAD Approved Maritime Security Awareness Classes
Marinelog Maritime & Port Security 2008 Conference & Expo ....28-29 Jan. 2008, Crystal Gateway Marriott, Arlington, VA.
Multimodal 2008 .... 22 to 24 April 2008, Birmingham, UK
Transportation & Logistics Council's 34th Annual Conference........ April 20-23, 2008, Catamaran Resort Hotel, San Diego
Terminal Operations Conference & Exhibition for Asia ......... 18-20 March 2008, Shanghai Int'l Convention Center
Transport Logistic China ........ 17-19 June 2008, Shanghai New Int'l Expo Centre
Transportation & Logistics Council's 34th Annual Conference ......... April 20-23, 2008, Catamaran Resort Hotel, San Diego
10 Most Amazing Google Earth Search Tricks
Deep Blue Marine Treasure Project Contest
Bad Day At The Office ....... a movie
Highlights of the 2007 Midland CAF/FINA Airshow
Lion Mutilates 42 Midgets in Cambodian Ring-Fight ..... sometimes it turns out to be true
Remember Me ......... made by a 15 year old girl who made me cry
Step-by-step Video Guides to Life's Most Important Issues ...... life explained on film
Spanish For Your Nanny ........ not to be missed
The Case of The Tongues of Fire
Uncovering America By Horseback
Top Ten Lists For Every Subject Imaginable
Trees of Mystery
U.S. Foreclosure Radar ...... what's in your neighborhood?
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases ____
U.S. District Court of Appeals for The District of Columbia
Hours of Service Rule -- The court has rejected a request by several advocacy groups, led by Public Citizen, seeking to overturn the interim hours-of-service rule issued by the Federal Motor Carrier Safety Administration last month. The U.S. Court denied Public Citizen's request to have the court "enforce" its ruling from July striking down the 11th hour of driving and the 34-hour restart. The advocacy group had sought to have the court force FMCSA to reissue its interim rule without those two provisions, on the grounds the agency had not allowed for proper levels of notice and comment from the public before retaining the controversial pieces of the rule. FMCSA said in a statement that "the court denied a request by an interest group to stop FMCSA from implementing its interim final rule on hours of service . . . . Accordingly, the interim rule remains in effect. FMCSA is continuing to solicit comments on the rule until Feb. 15. Read 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)
Maria Payne (Countryman & McDaniel)
Christoph Whaner, Esq. (Countryman & McDaniel)
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