Industry News
From The Cargo Letter

Air & Ocean Freight Forwarder - Customs Broker News
12 August 1996

Good Monday Morning from our Observation Deck...... overlooking the officially designated "Cargo City" area and....... Runway 25-Right at Los Angeles International Airport. Expeditors Int'l will join "The Cargo Letter 10" stock report when it returns in our next issue. We have Pirate news today!

Congratulations to Circle Int'l & UPS for their gold medal cargo performances in the Centennial Olympic Games at Atlanta !

Contribute your news & knowledge to The Cargo Letter.


INDEX to The Cargo Letter:

  1. OUR Top Story
  2. Forwarders Face New Security Requirements OUR "A" Section: FF World Trade, Financial & Inland News
  3. Freight Forwarder Trade Briefs
    OUR "B" Section: FF World Air News
  4. FF World Air Briefs
    OUR "C" Section: FF World Ocean News
  5. Pacific Pirate Raids On The Increase
  6. FF World Ocean Briefs
    OUR "D" Section: FF in Cyberspace


OUR Top Story

1. Forwarders Face New Security Requirements

by Edward D. Greenberg, Esq.

Editor's Note: With the tragic loss of TWA Flight 800 have come new federal security regulations, many unfounded rumors and confusion over which is which. As General Counsel to the National Customs Brokers and Forwarders Association Of America, noted Washington, D.C. transportation attorney & forwarder advocate Edward D. Greenberg recently met with high level officials of the FAA to clarify the new regulations and speak for YOU. The Cargo Letter is proud to present Mr. Greenberg's report of these proceedings.............

Mr. Greenberg reports..........

Washington, D.C. - On August 2, 1996, representatives from the NCBFAA met with top officials of the FAA in Washington to discuss the recent amendment to security requirements for indirect air carriers. The FAA explained that these new procedures were being required of both indirect and direct air carriers, although the direct air carriers had special procedures directed to them which became effective on August 2. The FAA also explained that they felt that the new requirements, while not perfect, will act as a possible deterrent to some forms of terrorism. Further, if these procedures prove to be ineffective, the entire industry could expect more stringent rules.

For example, a recent review by the FAA of procedures at four air forwarder facilities revealed substantial shortcomings with respect to the handling of unknown shipper cargo. In none of those cases was the cargo inspected or was any information sought from the shipper with respect to the contents of the cargo. Thus, in those instances, terrorists could very well have wreaked substantial damage on a passenger plane. Accordingly, the FAA is taking very seriously its obligation to tighten security for passenger operations. Ongoing discussions between the FAA and the NCBFAA will continue to work toward a workable, successful program, and we are able to provide you with clarification on a number of issues.

First, insofar as timing is concerned, the FAA is not surprisingly unwilling to extend the compliance date for these new rules. The agency is under an enormous amount of pressure following the ValuJet and TWA crashes, and it has reacted by issuing these new directives. While they may be amended as time goes by, they will not be postponed.

The directives issued to air forwarders do become effective on August 9, 1996. Of course, the agency also issued amendments to the security plans of the direct air carriers which became effective on August 2, 1996. While we understand that some airlines have taken the position that air forwarders must also comply as of the earlier date, the FAA is not likely to interfere with that early implementation. Accordingly, the implementation date is August 9 or any earlier date upon which an airline may be insisting. However, under the FAA scenario, shipments already moving in the pipeline that are being tendered by air forwarders to airlines can lawfully be accepted by the airlines without the new required certifications until August 16.

Second, the certification required by Section III.2 of the amended security plan must be completed by the "shipper." From the FAA's perspective, the shipper includes the party actually tendering the cargo to the first carrier. In other words, if the shipment is picked up from the customer's premises, then it is that customer who must sign the certification. If the customer instead is ordering cargo out of a warehouse or distributor, for example, then the warehouse or distributor is the party that must complete the certification.

Third, it is not required that the obligation for obtaining two forms of personal identification be obtained from the person executing the endorsement certification. If that is difficult to obtain, it is perfectly proper to insist that the carrier delivering cargo to your premises (or directly to the airline) provide the two forms of identification. However, please note that at least one of those forms of identification must include a picture of the person who is delivering the cargo. (In other words, if the cargo is coming into your dock via UPS, the UPS driver's identification would suffice for compliance with the rule.)

Fourth, you should also pay particular attention to the obligations pertaining to "Other Than a Known Shipper" in Section IV.2. That provision provides that such shippers "may not be told which flight their cargo will or may be transported on." Among other things, this undoubtedly means that it would be inappropriate to provide such a party with a copy of a completed house air waybill until such time as the plane has actually departed, since the house air waybill provides spaces for identifying the flight and routing of air shipments.

This particular issue poses a potential problem under the Warsaw Convention. Several years ago, in a case entitled Maritime Ins. Co. Ltd. v. Emery Air Freight Corp., 983 F.2d 437 (2nd Cir. 1993), the Court of Appeals invalidated the air carrier's Warsaw Convention limitation of liability of $9.07 per pound (or US$20 per kilo) because it had failed to comply with the requirements of the Convention that it show the complete routing of the shipment on the air waybill. Therefore, preparing an air waybill without the routing information could be a problem. Thus, the practical answer would seem to be to either not provide a copy of the air waybill to an "unknown shipper" until after the shipment has moved or to make sure you blank out all of the routing information from whatever copy is given to the shipper at an earlier stage.

Also, please note the requirement that cargo being tendered by "other than known shippers" must be tendered "separately from cargo which originated from known shippers." (Section IV.1.) From the FAA's perspective, this means that such shipments should be tendered separately, identified separately and not stuffed in the same container with shipments from "known shippers."

We expect to be working closely with the FAA over the next several weeks to further refine the security obligations and to answer questions which might arise. As part of that process, we will be compiling a series of operational questions and our interpretation of the answers for FAA approval and concurrence. Accordingly, we would be pleased to receive any questions or problems you might be having concerning this subject. [Edward D. Greenberg is a partner in the Washington, D.C. firm of Galland, Kharasch, Morse & Garfinkle, P.C.]


OUR "A" Section: FF World Trade, Financial & Inland News

2. Freight Forwarder Trade Briefs


OUR "B" Section: FF World Air News

3. FF World Air Briefs


OUR "C" Section: FF World Ocean News

4. Pacific Pirate Raids On The Increase

Pirates are back and more violent this year, according to the Kuala Lumpur-based International Maritime Bureau's Piracy Center. "No statistical analysis can adequately describe the appalling ferocity so far this year," said John Martin, IMB regional manager, in his latest piracy report. Pirates armed with automatic firearms opened fire and killed 9 of a crew of 10 on F/V Normina off Basilan Island, in the southern Philippines on February 26, the report said. The 10th crew member was injured but escaped.

There were 87 cases of piracy reported up to June '96, compared with 86 cases for the same period last year. For all of 1995, 170 cases of piracy were reported to the IMB. Indonesia remained a high risk area, with 22 piracy cases in the first six months of the year compared to 20 last year. Most attacks occurred for vessels at anchor, in contrast to last year when most attacks occurred in port. There was a reduction of pirate activity in the Hainan-Luzon-Hong Kong triangle from 7 cases to 2 in the first 6 months of the year, but for the first time in years pirate attacks off Thailand were reported......for a total of ten.........followed by 7 off Brazil, 6 in the China-Hong Kong-Macau area, 5 off Sri Lanka and 4 each in Malaysia and the Philippines. It has always been very dangerous out there! Urge your customers to buy proper MARINE CARGO INSURANCE !!!

5. FF World Ocean Briefs


OUR "D" Section: FF in Cyberspace

UPS WW Web Trucks? for only the third time in history UPS will change its package vehicle design to display the UPS internet address. Accessed more than 200,000 times a day, the UPS Web site enables users to track packages, calculate and compare shipping costs, determine transit times, download rate charts, download tracking or calculation software.

New U.S. Customs Site........This improved international trade site furnishes the latest enforcement activities, travel information, employment, decisions from the Office of Regulations & Rulings, and press releases. Resources are also provided relative to importing/exporting, customs auctions, and weekly import quotas. You may also report smuggling online!

Uncle Sam shopping for all government services and information. Called the "General Store", the site is still building with more agencies being added daily.

NAFTA's Home Page...............The Office for the Study of US-Mexico Trade Relations and the NAFTA Information Center have established a WWW site containing a full text searchable database on NAFTA & Latin America trade-related articles (over 10,000 newspaper articles).

Italy PORTNET (Savona, Genova, La Sepzia & Naples)

Plutonium Air-Ocean Shipments (Routes/details)

Towne Air Freight (Regional Air/Ocean,South Bend,IN.)

Viking Freight Systems or [an error occurred while processing this directive]