Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
30 June 2003
Part 1 of 1
Good Monday 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." The SARS epidemic is said to have started last Nov. in the city of Guangzhou, capital of Guangdong Province -- the very week Byron Countryman & Michael McDaniel of The Cargo Letter were there. Next month we report The Cargo Letter to you again from China. Well, it didn't get us the first time!
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Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker attorneys at LAX.
NOTE: The Cargo Letter is designed to be read using a 12 point Geneva font on a standard 6 inch e-mail filed. Our TECHNICOLOR edition requires AOL v3.0 or better.
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 U.S. Transport Related Legal Cases ________
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs _____________
***CSI Part Deux .......... as the U.S. Dept. of Homeland Security has announced the beginning of Phase II of the Container Security Initiative (CSI), formally expanding the program to more than just the top 20 foreign container ports. In Europe, U.S. Bureau of Customs & Border Protection (formerly, U.S. Customs Service) reports the CSI has become operational at the ports of Genoa & La Spezia, Italy -- expanding to at least 11 additional ports, including Livorno, Gioia Tauro, & Naples. In Asia, the governments of Sri Lanka & Thailand have now signed agreements to join CSI. The program is also operational in the ports of Rotterdam, Le Havre, Bremerhaven, Hamburg, Antwerp, Singapore, Yokohama, Hong Kong, Goteborg, Felixstowe, Vancouver, Montreal & Halifax. Read more.
U.S. Customs 1
***Japan Economy Inches Forward ........ as exports rose 6.4% in May from a year previously, according to government statistics just released. In May, exports were 2.395 million tons compared to the May 2002 figure of 2.250 million. Imports were also slightly up at 2.368 million tons compared to the year ago figure of 2.236 million, representing a rise of 5.9%.
***NTSB For EC?....... as the European Commission intends to set up an Independent Group of Experts to advise the EC on a strategy for dealing with accidents in the transport sector. The Group would conduct independent technical investigations geared toward revealing the causes of accidents & would be modeled on existing legislation regarding accidents in air transport.
***Chile Is Free! ...... as it is the 1st South American country to have a free trade agreement with the U.S. The agreement requires congressional approval in both countries, which agreed to terms in Dec. U.S. president George Bush received trade promotion authority last year that is expected to speed up approval in Congress. The accord promises to eliminate or lower tariffs by as much as 85% of the bilateral trade exchange between the nations, which now stands at around US$6Bn a year.
***Yes, No Quota, Please! ......... as a prelude to upcoming textile trade talks between the U.S. & Vietnam, 35 major U.S. clothing manufacturers have submitted a letter urging their administration not to slap a quota on Vietnamese exports, calling such a move "very troubling" for U.S. importers. A letter to U.S. Trade Representative Robert Zoellick carries the signatures of a dozen retail chain heavyweights -- including Gap, Federated & May department stores, Sears Roebuck, K-Mart & Target - and brand names from Nike to Liz Claiborne. The petition comes 2 weeks ahead of a U.S. trade delegation's arrival in Vietnam to negotiate the terms of a textile trade agreement that has been preceded by speculation of a possible quota on Vietnamese garments.
***Hold Your Burma Contracts ...... as the U.S. Congress wants to ban the sale of Burmese products in the U.S. to protest the refusal by that country's ruling party, the State Peace & Development Council to relinquish power to the National League for Democracy, which won power in the 1990 elections. Two bills were introduced into the House & Senate on June 4, known as "The Burmese Freedom & Democracy Act of 2003." The U.S. has had limited sanctions on Burma since 1997 because of its human rights violations. Sources say the effort to impose a complete import ban could gain momentum in light of the Burmese government's violent crackdown against democratic activists.
***Running The Stonepath ....... as the rapidly expanding global logistics provider will acquire Customs Services Int'l, a privately held Int'l forwarder & customs broker based in Miami. The acquisition will significantly enhance its presence in Miami & provide it with a powerful platform throughout Central America, South America, & the Caribbean. The announcement came just days after Stonepath disclosed that it has acquired Regroup Express, a Sterling, Va.-based company specializing in service to U.S. government agencies & contractors. The Philadelphia-based forwarder plans to acquire G-Link, a Singapore-based forwarder with revenue of US$18M in 2002, by the end of 3rd quarter. Dennis Pelino, Stonepath's chairman & CEO, was in Singapore last week for discussions with G-Link. The acquisition effort resembles the same strategy employed during the 1990s by Fritz Cos., where Pelino was a top executive. That company's spending spree expanded gross revenue from US$40M to US$1.6Bn but ultimately led to hard times at Fritz, which was subsequently acquired by & is now flourishing at UPS Supply Chain Solutions, Inc. >> Our friend Jed Shapiro has sold his interest in Seattle based Transgroup Int'l Logistics to become a division CEO in the Stonepath organization & believes this is "one to watch" with a US$1Bn goal in 5 years. Indeed, Stonepath seems running on solid ground.
***Panalpina Splits Personality ........ as the Swiss logistics giant, is revising its regional management structure in the Americas, with the region being split into 2 separate parts for North & Latin America. The U.S. & Canadian organizations are being separated from Latin America to form a region of its own. Although the location of the region's U.S. head office has not yet been decided (we say Chicago or San Francisco), the Latin American business units will continue managed from Miami.
***Panalpina Makes A Fashion Statement ....... as it is now offering logistics services for the fashion industry from a new facility in the U.S. The new "Fashion Center" will enable Panalpina to handle a larger volume of luxury products bound for the North American market. Panalpina inaugurated its new Fashion Center near Newark Airport in Secaucus, New Jersey, to enhance its logistics services for the luxury fashion industry - a sector for which New York is the main trading center in the Americas. Staffed by 40 employees, the Center comprises 6,200 sq. meters of warehousing & 600 sq. meters of office space. Panalpina uses this facility both as a platform for onward distribution & for longer-term storage. The products -- most of which originate in Italy, Switzerland, France, Germany or Hong Kong - are customs cleared when they arrive.
***UPS & eBay Take Step ....... as they are to extend their multiyear relationship & introduce a new suite of shipping tools throughout the eBay marketplace. The new services calculate costs for various UPS & postal services, track UPS shipments, review transit times & print shipping labels, all at the point of transaction. Sellers no longer need to toggle from eBay to UPS's Web site to process or track shipments, nor do they have to e-mail this information to their customers. Sellers also can provide buyers the capability of calculating UPS or USPS shipping costs based on their ZIP codes directly from the "View Item" page. The solution provides much greater transparency of shipping information & significantly simplifies the exchange. This is actually quite a big deal.
***Translink Shipping Now Speaks German ....... as the Seattle based forwarder has expanded to Europe with a newly established office in Hamburg. Translink Shipping GmbH is the company's 25th branch office. Translink has been active in the NVOCC field for more than 16 years.
***Exel In A Turkish Delight ..........as the chain management company has agreed to acquire Transbeynak, a leading regional forwader based in Turkey. Transbeynak, founded in 1967, provides 3PL to the pharmaceutical & healthcare markets. It operates both bonded, temperature controlled facilities with a mixture of manual & automated specialist packaging & labeling operations. The company has a significant market share in Turkey & works in partnership with 12 of the world's leading pharmaceutical & healthcare companies, including Boehringer Ingelheim & Bayer from its 2 facilities in Avcilar, W. of Istanbul.
***Deringer, Aims -- Fires ....... as customs broker A.N. Deringer, Inc. has launched Neologex, a non-asset based, 3rd party logistics service provider. The new company will offer supply chain engineering & operational execution to midsize companies. Memphis-based Neologex will supply the full range of services in Int'l shipping.
***Wal-Mart Demands The Future ....... as it has all but required its suppliers to adopt the radio frequency identification (RFID) and the EPC (electronic product code) standard by January 2005. Wal-Mart is said to have stepped in because the technology is evolving too slowly on its own. Readers are still expensive, & unless RFID tags are purchased by the hundreds of millions, the US$0.50 to US$0.75 unit cost is well beyond a threshold that makes them a compelling value. But Wal-Mart's pressure should change much of that. As these companies buy more tags, prices will drop. An increased number of pilots will result in a stronger technology industry being built to support them. With risk minimized & prices brought into line, adoption will speed up & move beyond the Wal-Mart supplier base.
***Rails West ........ as RailAmerica, Inc. & the Union Pacific Railroad announced that UPRR has sold a branch line in Colorado to RailAmerica's newly formed, wholly owned subsidiary, San Luis & Rio Grande Railroad Company ("SLRG"). The SLRG commenced rail service on June 29, 2003. This acquisition brings the total number of railroads owned & operated by RailAmerica to 50. The SLRG, headquartered in Alamosa, Colorado, operates 2 segments of rail line in Colorado totaling 154 miles from Walsenburg to Derrick, & from Alamosa to Antonito. RailAmerica expects to realize synergies & cost savings by operating the SLRG within RailAmerica's existing Heartland region, which includes the 692-mile Kyle Railroad that operates in Colorado & Kansas. The SLRG expects to generate approximately US$3.5M in operating revenue on this line in its 1st full year of operation. Major shippers on the line include Harborlite, Dicaperl & Coors Brewing. >> RailAmerica reported that as compared to the same period in 2002, May 2003 North American "same railroad" carloads increased 1.4%.
***FedEx Freight East On Long, Safe Haul ........ as it has taken 1st place in the American Trucking Assn. (ATA) National Fleet Safety Contest in the line haul carrier category for over 100 million miles of operation. This is the 3rd consecutive year that FedEx Freight East has won this award, which is based on the lowest accident rate per million vehicle miles of operation.
***Old Dominion Freight Line Goes Up ...... as the U.S. LTL motor carrier has announced adoption of a rate revision effective July 1, 2003, that will result in a general rate increase with an anticipated overall impact of approximately 5.8% -- expect more to follow.
***Classification Changes By E-mail ....... as KPMG has enhanced the import classification research system of its Web-based customs compliance library. The new system, cDoc, integrates classification research & communication needed by importers to satisfy their correspondence and record-keeping requirements with the U.S. Bureau of Customs & Border Protection. Another new feature is CI Alert, an instant notification system that advises of changes to the Harmonized Tariff Schedule & Customs rulings issued that could affect product classifications and the system's Global Tariffs, which provides tariff information & landed cost estimates for more than 100 countrie
***Precious Cargo ........ as a team of "Ground Zero Heroes", current & former New York City Firefighters & Policemen who provided emergency services on Sept. 11th, has left for Baghdad on another mission - to deliver a cargo of food & emergency supplies to Iraqi orphans & children. The mission, called "The Diageo Iraq Humanitarian Airlift," departed June 22 from Duane Street Fire House & included Fire Dept. Chaplain Monsignor John Delendick. Said Monsignor Delendick, "In times of trouble, we answer the call to duty -- so it was on Sept. 11 at Ground Zero & so it is today in Baghdad. There are thousands of orphans & school children in need of food & supplies that we take for granted every day in the U.S.," said Delendick. These same Ground Zero Heroes delivered food & emergency supplies to orphans in Kabul, Afghanistan in Dec. 2001, just 3 months after the attack on the World Trade Center. Heroes.
***The Butt Police ......... as 5 importers who allegedly delivered more than 215,000 cartons of fake Marlboros & other Philip Morris-brand cigarettes are being sued by the tobacco giant, along with nearly 1,500 retailers accused of selling the bootleg smokes. The lawsuit follows an undercover audit earlier this year during which Philip Morris says cigarettes were purchased from every known retailer in the Los Angeles area. The defendants include small convenience stores, liquor stores & even doughnut shops. Contraband tobacco is a relatively recent phenomenon brought on by a sharp increase in the price of cigarettes that was caused by higher tobacco taxes. More than 20 states increased their cigarette taxes last year, and a pack of smokes now ranges from US$3.00 in Virginia to US$7.50 in New York. In California, the state Board of Equalization, which deals with tax matters, estimates it loses as much as US$270M a year due to a variety of tobacco-related tax evasion schemes. Most of the counterfeit cigarettes bought in Southern California bore the Marlboro brand & were found to contain tobacco grown in China. Many of the packs also had counterfeit tax stamps. The lawsuit follows similar legal action by Philip Morris against 612 retailers, most in California. Many retailers have entered into consent agreements with the company & were not found to be selling counterfeit cigarettes in subsequent visits. Geez, how to you visit every store in LA? Don't cross these guys.
***Customs Chemical Canines ......... as chemical detector dogs (Chem Dogs) have been deployed at U.S. borders & ports in order to better detect attempted smuggling of chemical weapons such as sarin & cyanide. "Chem dogs add to our ability to detect & seize chemical weapons at our borders, before they reach intended targets in the interior of the U.S. These dogs are helping to protect America & our homeland," said Robert Bonner, Commissioner of Customs & Border Protection (CBP). U.S. Customs, now CBP, began training chemical detector dogs early last year through its Canine Enforcement Training Center. Detector dogs were 1st introduced by U.S. Customs on a wide scale in 1970 as part of a major effort to interdict narcotics being smuggled through major air/sea & land border ports.
***Faulty Fido Fraud ....... as a dog trainer was convicted last week of contracting defective bomb-sniffing dogs to the U.S. government. Russell Lee Ebersole, 43, of Hagerstown, Md., is the owner of a Virginia business that trains dogs to detect drugs and explosives. After the Sept. 11, 2001, terrorist attacks, he charged various government agencies more than US$700,000 for the use of his dogs. The government said Ebersole's dogs failed in at least 4 tests to alert government handlers to the scent of explosives. A federal jury found him guilty of 27 counts of defrauding federal agencies. The indictment against Ebersole alleged that in one test, his dogs & handlers were unable to detect 50 pounds of dynamite &15 pounds of plastic explosives hidden in vehicles. This could also spell the end of Ebersole's contract to supply blind aviation mechanics. We'll take the train.
***Trade Deal Gone Wild ...... as a Vietnamese man who used cow fat & paint to pass off a lump of iron as valuable black bronze found buyers -- but was paid in counterfeit bills. A justice official said 12 people involved in both frauds were arrested & undergoing trial in southern An Giang Province. Eight were accomplices of the accused metal con artist, while 3 were involved in the alleged counterfeiting. Huynh Van Gat confessed he had painted a 1 kg iron lump with cow fat & black paint & tried to pass it off as black bronze & sought to sell it for one billion dong (US$64,683). Black bronze is used in making jewelry & ornamental objects like statues. A group business people from Ho Chi Minh City who were negotiating to buy the black bronze, bought a printer to produce 900 million Vietnamese dong (US$58,214) to pay for the deal. The black bronze is valued on the market at around US$1M. Mr. Gat & his accomplices were arrested a few days later when local shops tipped off the police about the fake dong. The men told police they didn't know the money was counterfeit & revealed where it came from -- leading to the arrest of the others. Counterfeiting money carries a penalty ranging from 3 years in prison to death by firing squad in communist Vietnam. Counterfeiting of a rock is evidently a lesser charge.
2. The Cargo Letter Financial Page ____________
**FedEx. UP as net income of US$280M was up 19% from last year's US$236M. Total average daily package volume at FedEx Express & FedEx Ground grew a combined 5% year over year for the quarter, due to continued strong growth at ground and in Int'l express shipments.
**UTi Worldwide Inc. UP as net revenues advanced 71% to US$131.4M from US$76.9M in 1st quarter ended April 30.
***SAS Looses Altitude ........ as Moody's Investor's Service has downgraded SAS's credit worthiness from Ba1 to Ba3 for the company's "senior implied rating," a downgrading by 2 levels.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs __________
***FedExemployees ...... as the giant will trim up to 14,000 jobs from the 116,000 workers in its domestic express service by offering voluntary severance packages & early retirement to cut long-term costs. The company expects the new job reductions to produce annual operating savings of US$150M to US$190M by 2005.
***FedEx Freight Goes Up ....... as it implemented a 5.9% general rate increase starting June 30. The increase will be applied by the company's two operating units, FedEx Freight East & FedEx Freight West, and applies to intra- & interstate traffic, including Canadian trans-border and other Int'l lanes, as well as accessorial & minimum charges.
***Open Wide ........ as the EU-wide "open skies" agreement between the U.S. & the European Union will replace the current bilateral deals between the U.S. and individual countries & allow European airlines to fly to the U.S. from any European airport & vice versa. Under the current bilateral agreements, European airlines can only fly to U.S. destinations from their home country as Member States restrict Int'l traffic rights to the national flag carriers. In Nov., 2002, the European Court of Justice stated that bilateral agreements were in breach of EU laws. Airline experts believe that an EU-wide "open skies" agreement will lead to a consolidation of Europe's airline industry & improve its competitiveness. The Commission has said it hopes that a deal with the U.S. would create an Open Aviation area, which would account for more than 60% of all world air traffic.
***Back To Iraq ....... as World Airways, Kalitta Air & Northwest Airlines received authority from the U.S. Dept. of Transportation to provide scheduled air service to Iraq. Commencement of actual operations is not imminent since the U.S. provisional authority in Iraq has yet to determine that it is safe for civil air transportation to resume and the carriers must still meet requirements of the FAA, Transportation Security Administration, Dept. of Defense & other agencies. The permits follow the U.S. government's lifting in May of a 13-year embargo on most commercial trade with Iraq. World Airways plans passenger & cargo service betwen Washington Dulles Airport & Baghdad via Geneva. Northwest received permission to operate scheduled combination service between any U.S. and any Iraqi city & beyond, with service via Amsterdam. Kalitta plans all-cargo service between the U.S. & Iraq & also plans service to Kuwait & Jordan. United Airlines, American Airlines & Delta Airlines have existing authority to serve Iraq.
***Spending Spree Catches DP? ....... as Moody's Investor Service has downgraded Deutsche Post World Net's credit rating for long-term debt by one level from Aa3 to A1 and left it on the observation list with "negative outlook." The short-term credit rating of P-1 was confirmed by the agency. Moody's said one reason for the move, amongst others, was because of the planned purchase of Airborne, which is seen as an additional risk for the German company. This contrasts with Standard & Poor's positive assessment of the possible deal to acquire the U.S. #3 express carrier.
***Terror Flight? ......... as a Boeing 727 mysteriously took off & disappeared from Luanda Airport in Angola last month. Int'l authorities fear jetliner could be used for terrorist act. The 727 refitted to haul diesel fuel tanks, making it potential flying bomb. Not seen since take off, Benjamin Padilla -- a U.S. citizen from Florida is suspected of piloting the 727. Last time family heard from Padilla was May 14, when e-mail informed that he was on way to Africa & would get in touch with his ailing mother as soon as he returned home. Padilla, too, has vanished, & family worried. Family believes Padilla, a licensed mechanic & pilot, flew to Angola on behalf of Aerospace Sales & Leasing, a Florida-based company that bought the 727 from American Airlines 2 years ago. The 727 had not been moved for a year -- family believes Padilla went to see whether it was fit to fly. Despite use of satellites to scour African landscape, & request to all African embassies for information, U.S. officials still have no clue about plane's location. Have not ruled out possibility 727 is in hands of terrorists -- perhaps plotting to target U.S. embassies in Africa. Family says "He was a (U.S.) patriot, he loved his country, he loved to fly." Whatever the circumstances there is no chance of this plane causing mischief in the mainland U.S. or most of Europe. The big question is what present circumstances might put Western installations in Africa at risk. This incident is most likely commercial -- a failure of payment -- but until this is confirmed -- Pray.
***Cathay Pacific SARS Stats ......... as passenger & cargo statistics for May showed the full impact of the outbreak on the company. Cathay carried 243,976 passengers, down a whopping 74.9% on the same month last year, with the average number of passengers carried each day being around 7,800. By comparison, the airline carried a total of 915,741 passengers in March this year. The passenger schedule was reduced by 45% in May, with the airline being forced to reduce flight frequencies to most destinations. Cargo traffic dampened a little in May, though the airline maintained its full freighter schedule throughout the month. A total of 64,401 tons of cargo was carried, down 9.6% on the same month last year. The month's cargo load factor was 76.1%, up 6.1% from May 2002.
***Son of Swiss Sick ....... as it is to cut around 3,000 jobs & withdraw 34 aircraft from service in a massive cost-cutting exercise. Swiss Air said it was reacting to far-reaching changes in the airline market. The airlines' Board of Directors said it had approved the cornerstones of the new "business plan" that involves reducing the long-haul fleet to 18 aircraft, the medium-haul fleet to 21 & the regional fleet to 35. The changes will take effect at the start of airline's 2003 winter timetable. Remember, this is the "new" Swiss Air, after the original failed a couple of years ago.
***Could SIA Become MIA? ....... as Singapore Airlines (SIA) has laid off 414 employees, including 4 staff from its cargo unit, in the wake of experiencing losses of over US$117M in April & US$90M in May. The airline's passenger numbers have slipped almost 60% & capacity is off by a 33%.
***SAS Cargo More Calculating .........as the carrier has developed an online calculator to show the environmental impact of transporting cargo around the world. The calculator measures emissions data in relation to air cargo & was developed following a collaboration between Novo Nordisk, Novozymes, DHL Danzas Air & Ocean and SAS Cargo. Try it out yourself.
***Cargo 2000 More Grounded ........ as ground handling agents (GHAs) are now eligible to become industry associates of Cargo 2000 as the IATA interest group of airlines & forwarders takes another step towards implementing a management system for the worldwide air cargo business. Roger Gibson, VP of United Airlines Cargo & chairman of Cargo 2000, said: "Ground handlers provide a vital service for airlines, freight forwarders & shippers." To qualify for membership, industry associates must be providing services in at least one of the gateways specified in Cargo 2000's network plan & must be able to demonstrate a commitment to quality management. They must be financially sound & able to prove their ability to comply with the quality management system. Applicants must be sponsored by a Cargo 2000 member & will need to be approved by the Cargo 2000 board. Cost of membership ranges from US$10,000 to US$25,000 per year, depending on the number of countries covered and the level of quality audits required. Cargo 2000 members include: Air Canada, Air France Cargo, Alitalia Cargo, American Airlines, Austrian Airlines, Baltrans Holdings, British Airways World Cargo, Cargolux Airlines Int'l, Cathay Pacific Airways, DHL Danzas, Delta Air Logistics, Eagle Global Logistics, Exel, Geologistics, Korean Air, Kuehne & Nagel, KLM Cargo, Lufthansa Cargo, Nippon Cargo Airlines, Panalpina, Polar Air Cargo, SAS Cargo, Schenker, SDV/SCAC, SwissWorld Cargo, United Airlines & Yusen Air & Sea.
***More FedEx At Hong Kong ...... as it will expand its logistics distribution capabilities around Hong Kong by entering an agreement with TradePort Hong Kong. FedEx will be the 1st express transportation company to establish facilities at TradePort, a company which helps service providers to optimize the handling of time-critical products. FedEx will occupy an open, variable area within the 40,000 sq. meter TradePort facility. FedEx plans to move into this new facility mid-July.
***More DHL Down Under ....... as it is developing a new airfreight facility at Sydney Int'l Airport in conjunction with the city's airport authority. DHL will lease the former Domestic Express Terminal from Sydney Airport Corporation Ltd (SACL) and develop a new purpose-built 6,200 square meter warehouse facility. It will be one of the largest transport terminals of its kind in Australia & will provide 150 jobs in the company's parcel freight & cargo forwarding business.
***Continental Airlines & TAP Air Portugal ........ as they have signed a marketing agreement that includes codesharing on selected flights, starting in Sept. Continental will codeshare on TAP-operated flights between Lisbon and up to 18 cities in Europe and Africa, including the Portuguese destinations of Faro, Funchal & Oporto and African destinations such as Maputo, Mozambique, Sal & Cape Verde Islands. Contiental has just renewed its 2001 codeshare deal with & KLM Royal Dutch Airlines.
***China Southern Airlines Says "MOO" ......... as the largest airline in The People's Republic of China, has now become the #1 airline in China in the safe and humane transportation of live animals. China Southern Airlines' Boeing 747-400 freighters, delivered less than one year ago, have already accomplished numerous "emigrating" missions of prized animals by air to/from more than 10 Int'l cities including Bangkok, Bombay & Chicago. "All I can say is 'MOO,'" said a VP of China Southern Airlines. "We don't care if the animal crows, roars or sings like a Canary ... we'll carry anything." Even in April, during the highest point of the SARS epidemic, China Southern Airlines successfully carried out six freight animal charters, generating US$785,000 in unplanned revenue.
***AERO Ontario LLC Looks Forward In The Big Orange ........ as it has been authorized by the Los Angeles Board of Airport Commissioners to construct an Int'l aircargo center at Ontario Int'l Airport (ONT), a unit of Los Angeles World Airports. The impetus for the project is increasing concern over the readiness of Southern California to accommodate expected growth of air cargo operations in the region over the next quarter century. Cargo to the Southern California region is expected to grow over 300% over the next 25 years and as the primary capacity at LAX for air cargo is limited, it is only a matter of time before freighter operators have to move inland. Ontario is the perfect choice due to its location & potential for development. The proposed cargo center site measures 105 acres on land that includes the former Lockheed Martin. ONT is about 40 miles East of downtown LA & handles more than 500,000 tons of air freight each year & expects to handle 6.85% more volume in 2003 over the previous year.
***BAX Global Helps The Adieu ....... as it handled all customs clearances for Air France's Concorde # F-BVFA supersonic transportation (SST) airliner as it recently entered U.S. airspace on its final flight -- to a new home at the Smithsonian Institution's National Air & Space Museum. The F-BVFA was the 1st Concorde to join Air France's fleet in Dec., 1975. The Concorde will be on permanent display at the Smithsonian's new companion facility, the Steven F. Udvar-Hazy Center, located at Dulles Int'l --scheduled to open Dec. 15. The F-BVFA 1st landed at Dulles Int'l Airport on May 24, 1976, after a 3 hour, 45-minute flight from Paris. It carried 92 passengers at a record-breaking cruising speed of 1,430 mph.
***China Southern Airlines Says "Moo" ....... as it is tapping into an unplanned revenue source by using its freighter fleet to transport live animals between cities. The airline's Boeing 747-400 freighters have already carried out a number of "emigrating" missions of prized animals by air to and from more than 10 Int'l cities including Bangkok, Bombay & Chicago. Even during the highest point of the SARS outbreak in April, China Southern successfully carried out 6 freight animal charters, generating US$785,000 in unplanned revenue. Numerous customers at home & around the world have sought out China Southern and, in less than a year, 31 special animal cargo charter flights with total capacity of nearly 3,000 tons have been completed. To meet customer demand, China Southern's new charter service offers individual flight departure & arrival to any worldwide destination -- and guarantees safe transportation of live animals.
***Hot Cargo ....... as having sex in Chile can take you to new heights. At least that's the claim of local brothel Fiorella, which offers clients a flight over the capital, Santiago, accompanied by 2 "ravishing women." For 350,000 pesos (US$600) a client is entitled to a 1.5 hour "session" in a small but lavishly decorated aircraft complete with a cooler for fruit & champagne. While this gives a whole new meaning to the concept of "more leg room in coach," there is no confirmation of new IATA regulations for these procedures.
***Flying Chicken ....... as Pacific Gas & Electric has asked the public not to launch any more chickens into its power lines. The utility is keen to avoid a repeat of a recent escapade in which a San Francisco prankster tied about 100 helium balloons to a chicken & sent it aloft where it became tangled in local power lines. The chicken, though uninjured, was left dangling for about 3 hours while PG&E crews brought it back to earth. The rescue effort required cutting power to about 5,000 people. The chicken is being put up for adoption by a local animal shelter, which has also launched an investigation to find those responsible. A retired Colonel from Kentucky has offered to adopt the chicken.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
***The Big Bomb? ........ as 7 crew of the Comoros-flag dry cargo M/V Baltic Sky, and its owners, face criminal action in Greece following Greek Special Forces seizure of 680 tons of explosives & 8,000 detonators -- equivalent of a tactical nuclear bomb. According to press reports the 5 Ukrainian and 2 Azerbaijani crew are charged with 'possessing & transporting explosives to 3rd parties for outlawed activities' Charges have also been filed against Baltic Sky's Marshall Islands' registered owner, Alpha Shipping Inc. The explosives-packed, 36-year-old vessel is being guarded by special forces at the Greek port of Platiyali, where it was intercepted following a reported tip-off from NATO. Greek Shipping Minister George Anomeritis said the Sudanese consignee company is nonexistent, questioned Baltic Sky's erratic voyage, & criticized both Tunisia & Sudan for not declaring the cargo of explosives. Sudan's Foreign Minister Mustafa Osman Ismail says it was a legitimate cargo for civilian use, Reuters reported. Maker of the explosives, Tunisian company Societe Tunisienne d'Explosifs & Munitions said that it had a legal contract to supply the Sudanese company which were to be used for legitimate civilian purposes including mining. There are rumors of a commercial dispute between shipper & shipowner that led to reports to authorities.
***Customs Is 1,000% Better! ........ as the World Shipping Council (WSC) welcomed news that the U.S. Bureau of Customs & Border Protection has increased container inspections without serious disruption in the flow of trade. Customs Commissioner Robert C. Bonner said that Customs is now inspecting 10.5% of the containers that land in the U.S. A year ago the rate was 2%, and the issue became a political point for administration opponents in Congress, and among Democrats vying for the 2004 presidential nomination. WSC said Customs is building a more robust cargo security infrastructure in the U.S. & at foreign ports through the Container Security Initiative. WSC said that Customs is making greater use of nonintrusive inspection equipment, & implementing more focused risk assessments of cargo.
***Please Let Us Know When You're Leaving ....... as with the U.S. Bureau of Customs & Border Protection expected to introduce a 24-hour advanced manifest rule on U.S. outbound ocean shipments on Oct. 1, shipping lines of the Westbound Transpacific Stabilization Agreement are waiting to decide on adopting any kind of voluntary surcharge guideline as a group to cover future costs. Referring to manifest documentation & other costs, the carrier spokesman said security-related costs would almost certainly become "a hot-button issue" in the coming year. In the eastbound transpacific trade, the Transpacific Stabilization Agreement has not issued joint recommendations on documentation surcharges related to the 24-hour rule covering inbound shipments from Asia, Customs is making greater use of nonintrusive inspection equipment, & implementing more focused risk assessments of cargo.
***Numast Calls For The Admiralty ...... as the UK marine officers' union warns that Royal Navy escorts should be sent to the world's most dangerous shipping lanes to protect British commercial vessels from the increasing the threat of piracy. The plea follows release of latest figures from the London-based Int'l Maritime Bureau (IMB) which reveal more than 100 attacks on merchant ships in the 1st 3 months this year -- an 18% rise over same period last year. Two of the attacks were on UK-flagged ships & 3 were on UK-controlled or managed vessels. In another incident, British officers on board an Isle of Man-registered supply ship were seized at gunpoint off Nigeria -- held hostage & manhandled -- had their personal possessions stolen before a ransom was finally paid. A Numast spokesman said that there had been "supportive noises" from ministers but no commitments to base warships in high risk areas such as the Malacca Straits, between Malaysia & Indonesia, & off the Horn of Africa. "We keep on trying to clarify what the position is for the Navy, what they can do & what are the rules of engagement," the Numast spokesman said. "Attacks are running at such a level they pose a direct threat to world trade. We know the Japanese government is considering sending warships to the Malacca Straits to protect its national vessels. The problem is Malaysia & Indonesia have such long coastlines." After Numast's annual conference in Harrogate this month, Brian Orrell, the General Secretary, declared: "These statistics demonstrate that owners, flag states & coastal authorities are failing to treat this dreadful problem with the priority it deserves. IMB figures recorded that 145 seafarers were killed, assaulted, kidnapped or missing in the 1st quarter of 2003 in attacks by pirates. Guns were used in 22 incidents & knives in 39. Other dangerous coastlines include Nigeria, Bangladesh, India & Somalia. Indonesia reported the most attacks. The Numast official said, "We believe the Royal Navy should return to its historic role, as it did in the 17th & 18th century, protecting British ships from pirates."
***Pirates Rule Bintan Island ........ as the Int'l Maritime Bureau's (IMB) Piracy Reporting Center has advised ships to take extra precautions around the vicinity of Bintan Island, Indonesia, as pirate attacks on cargo vessels in the area are 10 times higher than normal over the past 2 months. The warning comes after pirates carrying guns & knives attacked another ship on June 24 injuring an oiler & taking money & possessions belonging to the crew. The Piracy Reporting Center in Malaysia said the number of piracy incidents around Bintan Island over the past 2 months was unusually high & has risen from 1 or 2 incidents during the period to around 10.
***Saftety At The Squeeze Point ....... as the U.S. National Imagery & Mapping Agency (NIMA) issued a Notice stating that NATO warships are conducting escort operations in the Strait of Gibraltar in order to maintain security & to ensure the safe transit of designated allied ships. Vessels are requested to keep at least 500 yards clear of escort formations.
***FMC Lists "Controlled Carriers" ......... as the U.S. Federal Maritime Commission (FMC) released the list of ocean common carriers operating in the U.S.-foreign trade that it has found to be owned or controlled by foreign governments. Such carriers are subject to special regulatory oversight by the FMC. The carriers on the list are: (1) Ceylon Shipping Corporation; (2) COSCO Container Lines Company, Ltd.; (3) China Shipping Container Lines Co., Ltd.; (4) Compagnie Nationale Algerienne de Navigation; (5) Sinotrans Container Lines Co., Ltd.; & (6) the Shipping Corporation of India Ltd.
***A Conference Website! ......... as the Westbound Transpacific Stabilization Agreement (WTSA) is Online. The site contains general information about WTSA & links to individual ocean carrier member sites, listings of recent and upcoming adjustments to WTSA voluntary rate & ancillary charge guidelines, easy-to-follow tables and instructions for calculating the quarterly adjusted WTSA bunker fuel charge in advance, archived press releases, fact sheets, speeches and other materials of interest to the shipping community. WTSA members include: American President Lines, K Line, China Shipping Group, MOL, COSCO, NYK, Evergreen Marine, OOCL, Hanjin Shipping Co., P&O Nedlloyd, Hapag Lloyd Container Line, Yangming Marine & Hyundai.
***APL's Big Boost ........ as it's average freight rates in the 4 week period ended May 30 soared 30%, when compared to a year ago, providing the latest evidence of a dramatic recovery in container freight rates. NOL, parent of APL, said the 30% rise in average freight rates, to US$2,557 per 40-foot container, was "due mainly to the recent success in the transpacific contract negotiations & improved yield mix." The figures average out the carrier's global carryings, but APL is traditionally heavily involved in the Pacific market. Transpacific carriers implemented eastbound rate increases effective May 1 that were very close to their announced target of US$700 per 40-foot-container for a port-to-port move. APL reported its vessel utilization in the headhaul direction of major trades remained strong. Most container shipping lines have increased freight rates since the beginning of the year, including in the eastbound transpacific, eastbound & westbound Asia/Europe trade & westbound transatlantic trade. Last week, P&O Nedlloyd said typical Asia-to-Europe freight rates would amount to about US$1,500 per 20-foot-container in July, US$600 to US$700 more than a year ago.
***West Africa Up ...... as lines of the Europe West Africa Trade Agreement have notified shippers they plan to increase rates on Oct. 1. In the trade from Europe to West Africa, rates will increase US$403 or £249 for a 20-foot container, & by US$726 or £449 for a 40-foot box. Europe West Africa Trade Agreement conference members are Maersk Sealand, Nile Dutch Africa Line, P&O Nedlloyd, Safmarine & West-Afrika Linien-Dienste.
***Grab & Go Or Else ...... as marine terminal operators across the U.S. will focus their attention on the ports of Los Angeles, Long Beach & Oakland to see if California's terminals incur crippling fines under the anti-pollution legislation that takes effect July 1. The Lowenthal bill, named after its author, fines terminal operators US$250 for every truck that has to wait in line for more than 30 minutes. The California ports are 3 of the busiest in the nation, with the larger terminals handling 2,000 gate moves per day. It's common for truckers to wait an hour or more to pick up containers. While the legislation aims to cut diesel emissions from idling trucks, it does offer terminal operators two ways around the fines. A terminal gets a blanket exemption if it keeps its gates open at least 70 hours a week in Los Angeles-Long Beach or 65 hours a week in Oakland. But this can be a costly measure for terminals that do not generate enough traffic to justify extended hours. The 2nd option is the appointment system. A terminal that schedules truck arrivals will be fined only for those drivers that have an appointment & must wait for more than 30 minutes. A terminal will not be fined for truckers that arrive without an appointment, no matter how long they wait. So far, most terminals have opted for the less costly appointment system.
***Evergreen Again Ever Go ....... as longshoremen along the U.S. East Coast are moving cargo again for Evergreen Marine Corp. following a 4 week work stoppage. The June 12 resumption of work followed action by the carrier's North America agent, Evergreen America Corp., to withdraw charges against the ILA that were pending before the National Labor Relations Board. The handling of cargo containers and ships coming in & out of the U.S. East Coast was halted beginning May 14 over an issue involving Evergreen America's port captains.
***All Water, All The Time ....... as the Port Authority of New York & New Jersey has moved to boost its trade with Asia by signing a landmark agreement with the Panama Canal Authority. Under the agreement, the agencies will jointly promote to Int'l shippers the benefits of using all-water routes to transport commodities between Asia and the Port of New York & New Jersey. Asian trade volumes have increased by over 23% in the past 2 years at the port. "This all-water route is the best deal in shipping -- reliable, safe and inexpensive. We have set safety & efficiency records for the past two years and we are moving more ships through the canal safer & faster," said Aleman Zubieta, Panama Canal Authority Administrator. Asia is the Port of New York & New Jersey's largest trading partner, accounting for approximately 35% of all containerized cargo handled in the port in 2002. Indeed, much of the Port Authority of New York & New Jerseyvolume increase is due to ever escalating costs at U.S. West Coast Ports.
***Ditch Toll 2 ....... as the 2nd stage of Panama Canal toll increases will come into effect from July 1. Thereafter, pre-arrival messages must be sent no less than 96 hours prior to arrival date. Failure to comply may result in transit delays. In addition, Automatic Identification System (AIS) units will be required for transit. If vessels wishing to transit do not have AIS units installed, portable units must be rented at a cost of US$150 per transit. Rental of these units will be permitted until Dec. 31, 2004. Thereafter, all vessels must have AIS units permanently installed prior to transit.
***Biggest On The St. Lawrence ......... as Canada Maritime, a CP Ships unit, is set introduce 2 new Asian-built vessels into its fleet that will be the largest ever to ply the St. Lawrence River in North America. M/V Canmar Venture will begin operations in the line's Transatlantic services in July. Sister ship M/V Canmar Spirit will start service in Sept. The ships have been designed to cope with the particular requirements of the St. Lawrence River trades -- each is 294 meters long & 32.2 meters wide with a draught of 10.78 meters. Their nominal capacity is 4,100 TEU, with a service speed of 22 knots. "The ships will be the largest container ships ever deployed on the St. Lawrence River & have been built to cater for the growth in trade that our customers are anticipating over the next decade," said CP Ships.
***Wear'n The Green ........ as the Federal Maritime Commission has denied the motion for a stay & for reconsideration of a civil penalty in the amount of US$1,530,000 against the Taiwan NVOCC Green Master Int'l Freight Services for various violations of the Shipping Act of 1984 relating to tariff filing violations.
***Kiwi Gets CaroTrans ........ as Mainfreight Ltd. has bought the outstanding shares of NVOCC CaroTrans Int'l from its European partner, Ziegler Group. Auckland-based Mainfreight previously owned 49.5% of CaroTrans. The company purchased the outstanding shares for about US$1.85M. Ziegler bought CaroTrans from Arkansas Best Corp. in 1999. CaroTrans, once powerful neutral NVO in the U.S./Puerto Rico trade, seemed to have disappeared from the market under Arkansas Best. During that period, the consolidator was part of Clipper Int'l, a division of Arkansas Best's domestic intermodal service provider, Clipper Group.
***DFDS Tor Line Buy In ........ as the sea freight subsidiary of Denmark's DFDS shipping group, has bought 66% of Norwegian-owned shipping company Lys-Line AS for an undisclosed amount. The purchase marks a further consolidation of the intra-European shipping market. Lys-Line has annual revenues of about US$109M.
***Royal Caribbean Cruises Goes Ultra ...... as it has developed a design for a new & even more spectacular ship, the "Ultra-Voyager." The new Ultra-Voyager would be roughly 15% larger in space & passenger capacity that the earlier Voyager-class vessels. It would carry more than 3,600 guests (double-occupancy), 500 more than its predecessors. At just under 160,000 gross tons the Ultra-Voyager would provide even more room for passenger facilities & amenities and would provide even greater economies of scale than her predecessors. Royal Caribbean has 4 Voyager-class ships in its fleet today.
***Throughput. >> Port of New York & New Jersey grew robustly over the 1st 4 months of 2003 compared to 2002, as imports increased by 24.8% compared to last year, while exports increased by 9.4% -- while total imports & exports increased by 20% over the same period last year -- as TEU figures for the Jan. to April period were 643,510 for imports, 258,705 for exports & 902,214 in total. >> Port of Shanghai, the world's 4th largest port, over the 1st 5 months of the year amounted to 4.26 million TEU, up 35.6% against same period in 2002. >> Port of Tacoma showing record growth, with total container throughput for May was 28% ahead of same period in 2002 -- more than double the average growth at other west coast ports, about 13%.
***NVOCC Licenses Revoked For Failure To Maintain Valid Bonds ........ Brit-Am, Logistics Management Services Inc., Morrow, Ga.; Container Management Inc., Miami; Grand Bell Inc. dba Grand Bell Maritime U.S.A., Cerritos, Calif.; Rue Forwarding Co. Inc., New York; Trans Atlantic Container Lines Inc., Linden, N.J.; & Triple Star Int'l Freight Inc. dba Tagumpay Cargo, Union City, Calif.
***This Month In U.S. Navy History
*1813 - USS President anchors in Bergen, Norway.
*1815 - USS Peacock takes HMS Nautilus, last action of the War of 1812.
*1833 - USS Constitution enters drydock at Charlestown Navy Yard, Boston for overhaul. The ship was saved from scrapping after public support rallied to save the ship following publication of Olive Wendell Holmes' poem, "Old Ironsides."
*1864 - USS Kearsarge sinks Confederate raider Alabama off France.
*1917 - Navy convoy of troopships carrying American Expeditionary Forces arrives in France.
*1933 - Commissioning of USS Macon, Navy's last dirigible.
*1943 - 3rd Fleet Amphibious Force lands troops on Rendova Island while naval gunfire silences Japanese artillery.
*1948 - Berlin airlift initiated to offset the Soviet Union's blockade access of U.S., France, & Great Britain to their sectors of Berlin -- and feed Berlin.
*1950 - To support United Nations call to assist South Korea, President Harry S. Truman authorizes U.S. naval & air operations south of 38th Parallel, Korea.
*1951 - Naval Administration of Marianas ends.
*1959 - Twenty-eight naval vessels sail from Atlantic to Great Lakes, marking the formal opening of Saint Lawrence Seaway to seagoing ships.
*1962 - Naval Facilites Engineering Command Cape Hatteras makes 1st Sound Surveillance System (SOSUS) detection of a Soviet diesel submarine.
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!!
But you can read all this month's disaster news at our special Internet web feature which provides full details of each event -- our Vessel Casualties & Pirate Activity Database. Bookmark the site and visit every day! Updated twice daily.
SPECIAL NOTE: Did you see the "Columbia River Round Up?"
SPECIAL NOTE: Please view the dramatic new pictures at our special Gallery of Cargo Loss
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..............
After Supply Chains, Think Demand Pipelines
Bow Wave E-zine ......... news & views on trade, insurance and risk. Free.
California Trade Report
COSCO Container Lines ...... new E-Commerce platform
Eximin.Net .......Mumbai shipping & trade monthly.
Feds Mandate Background Checks For Hazmat Drivers
Market Driven Security Compliance
The Quest ........ freight forwarder & customs broker E-zine for June 2003. Free.
U.S. - EU Transatlantic Cooperation on Trade ....... a White House Fact sheet.
U.S.-EU Counterterrorism Cooperation ........ a White House Fact sheet.
EU Trade Relations With The U.S. ....... the European view.
Royal Institute of Naval Architects
OrderPro Logistics Inc. ....... logistics solutions for shippers & carriers.
Power Mac G5 ...... world's fastest personal computer.
Other Apple VeriTest
Traffic Gauge ........ mobile traffic map.
14th Annual BreakBulk Conference & Exhibition ....... Sept. 25-27, 2003, New Orleans Marriott in New Orleans, LA.
2003 National Maritime Conference ......... sponsored by American Salvage Assn., will take place Sept. 9-11, 2003 at the Hyatt Regency, Crystal City Hotel, Crystal City, VA.
Comite Maritime Int'l 38th Conference ....... May 31 to June 4, 2004, Vancouver, Canada -- Westin Bayshore Resort & Marina.
Int'l Trade Fair......... 10-12 Sept. 2003, Cancun, Mexico.
World Customs Exhibition On New Technologies ....... Sept. 22-24, in Budapest, hosted by Hungarian Customs at direction of the World Customs Organization.
World Maritime Technology Conference ....... 17 - 20 Oct. 2003, San Francisco.
Marintec China 2003 .......... 2- 5 Dec, 2003, Shanghai New Int'l Expo Center, Pudong, Shanghai, The All China Maritime Conference & Exhibition. Both Marintec China & Port China will be held concurrently at Shanghai -- world's 4th busiest port & center of the China's maritime industry!
Seatrade London Int'l Maritime Convention ........16-18 Sept. 2003, ExCeL, London, UK
Supply Chain Excellence 2003: Procurement & Inventory Strategies Symposium .......... Oct. 17, 2003, Chicago.
Word Maritime Technology Conference ..........San Francisco, California, 17-20 Oct. 2003.
G-6155 Interceptor ....... Rev up the chameleon like craft
Navy Photo of The Day
Pirates of the Caribbean: The Curse of the Black Pearl
"The Mighty Windy"
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _______
Libas Ltd. v. Carillo
9th Circuit U.S. Court of Appeals
May 28, 2003
Customs Duties / 19 U.S.C. SEC. 1514(a)(4): U.S. Customs at Los Angeles overcharged Libas on the duty rate of fabric he bought in India. Libas filed a protest under 19 U.S.C. sec. 1514(a)(4), and the Court of Int'l Trade held that Customs should re-liquidate the fabric at the lower rate & refund the excess money plus interest to Libas. Libas then filed an action against the customs workers, seeking consequential & liquidated damages, which the District Court dismissed. The 9th Circuit affirmed, holding that Libas cannot bring a claim when Congress has provided an alternative remedy for importers to challenge customs' classification of goods. AFFIRMED.
Tucker Vs. Fearn
11th Circuit U.S. Court of Appeals
June 10, 2003
Wrongful Death: Under general maritime law, a nondependent parent may not recover nonpecuniary damages for the wrongful death of minor child. In the instant case, plaintiff's decedent (his minor son) was killed when the boat in which he was traveling collided with defendant's boat on the Inter-Coastal Waterway in Alabama. Plaintiff was not financially dependent on his deceased minor son. Plaintiff sought, among other things, recovery for loss of love, affection, & companionship of his son and for emotional distress over son's death. The court ruled that nondependent survivors may not recover loss of society damages in wrongful death actions for a non-seaman's death in territorial waters.
BP Oil Inter'l, Inc. Vs. Empresa Estatal Petroleos de Ecuador
5th Circuit U.S. Court of Appeals
June 11, 2003
Int'l Sale of Goods: The UN Convention on Contracts for the Int'l Sale of Goods (CISG Convention) provides an independent basis for federal question jurisdiction. In the instant case, plaintiff contracted to provide & transport gasoline from Texas to Ecuador. The contract provided that the gasoline was deliverable CFR to Ecuador and that the gasoline was to have a gum content of less than 3 milligrams per 100 milliliters, to be determined at the port of departure. The gasoline was tested at the loading port by an independent company appointed by defendant & found to meet the contract requirements. The gasoline did not meet those requirements upon arrival in Ecuador & defendant refused to accept delivery. Plaintiff brought suit for damages. The trial court held that, under diversity jurisdiction, it should apply the choice of law rules of the state in which it was sitting. Under Texas choice of law, the substantive law of Ecuador applied & defendant prevailed on a motion for
summary judgment. On appeal, the court held that the CISG Convention applied, since the contract utilized the term "CFR", which means "cost & freight" and derives from the Convention as an Int'l Commercial Term (Incoterm). The court then held that reliance on the CISG Convention invokes the court's federal question jurisdiction. Under federal question jurisdiction & the CISG Convention, the Incoterm "CFR" means that title to & risk of loss of the goods shift to the purchaser once the goods pass the ship's rail.
Becker Vs. Tidewater, Inc.
5th Circuit U.S. Court of Appeals
June 19, 2003
Jones Act: An individual who only occasionally performs work of a seaman may not bring an action for personal injury under the Jones Act. Here, plaintiff was employed in a shore-based internship as a petroleum engineer. Work sometimes required him to travel by vessel to offshore oil rigs. On several occasions, he assisted crew on the vessel. While assisting with line handling, plaintiff was severely injured through no fault of his own. He brought suit alleging, among other things, negligence under the Jones Act. The court held that, because he was not employed as a seaman & because his connection with the vessel was not substantial (i.e., less than 30%), plaintiff was not eligible to bring suit under the Jones Act.
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
Cameron W. Roberts, Esq. (Countryman & McDaniel)
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