Industry News
From The Cargo Letter


Air & Ocean Freight Forwarder - Customs Broker News
16 December 1996

Good Monday Morning & Happy Holidays from our Observation Deck...!.... overlooking the officially designated "Cargo City" area and....... Runway 25-Right at Los Angeles International Airport.

Editor Note: We are pleased you enjoyed the new color feature for AOL readers in our [308] edition of 25 Nov. 1996.......but we are STINGING from complaints about the color background which made our publication impossible to read. Sorry. It was an experiment. We will continue to publish in color, but without the background. Otherwise, we are pleased you enjoy our major effort in producing The Cargo Letter. We depend upon your continued support for this free service to our industry.

Contribute your knowledge & e-mail to The Cargo Letter. Michael McDaniel

NOTE: The Cargo Letter is designed & sized to be read using a 12 point Geneva font on a standard 6 inch e-mail field. Please configure your computer.

INDEX to The Cargo Letter:

  1. OUR Top Stories
  2. Boeing & McDonnell Douglas Corp Announce Merger
  3. Former OOCL Chairman To Lead Hong Kong OUR "A" Section: FF World Trade, Financial & Inland News
  4. WTO Holds First Ministerial Conference In Singapore
  5. Creative Cargo Covers
  6. Freight Forwarder Trade Briefs
    OUR "B" Section: FF World Air News
  7. FF World Air Briefs
    OUR "C" Section: FF World Ocean News
  8. Attack Of The Giant Snails ! ! !
  9. Anti-Rebating Certification for 1997/1998
  10. FF World Ocean Briefs
    OUR "D" Section: FF in Cyberspace
  11. FMC Web Site Launched
  12. The Cargo Letter "Cyber Ports Of Call" OUR "E" Section: The Forwarder/Broker World
  13. Written Notice of Cargo Loss & Damage In Ocean Transport


OUR Top Stories

1. Boeing & McDonnell Douglas Corp Announce Merger

DECEMBER. 15 - In a rare Sunday announcement the air cargo industry was shaken with news this morning that America's two manufacturing giants will become one. Two weeks ago the companies made public an intent to cooperate on commercial heavy lift aircraft, but the outright purchase of McDo nnell Douglas Corp was unexpected. The new mega-aerospace firm will headquarter at Seattle......and be named "BOEING".

All subject to U.S. approval, the deal is said worth at least US$13B and will result in the world's largest aerospace employer of over 200,000.........yearly sales of about US$48B......and America's largest exporter. The company with continue major leadership in all aspects of the industry from civil aviation, to space, to the future U.S. fighter.

2. Former OOCL Chairman To Lead Hong Kong

-- by Warren S. Levine, for The Cargo Letter

December 12 -- Tung Chee-hwa, the 59-year-old former Chairman of Orient Overseas and a native of Shanghai, was elected yesterday by the Selection Committee to become the first Chief Executive of Hong Kong after the takeover of the colony by Beijing on July 1, 1997. Tung garnered 320 of the 398 votes cast, with his two competitors, former Chief Justice Yang Ti-liang, and businessman Peter Woo getting 42 and 36 votes each, respectively. Two votes were declared invalid.

Democratic Party Chair Martin Lee Chu-ming expressed his party's concerns in a letter to Tung, stating that Tung was "on probation," as he had not received the mandate of the people of Hong Kong. The Selection Committee was put together by Beijing.

Other leaders, both domestic and foreign, were more gracious in their statements following the election. British Prime Minister John Major was among the first world leaders to congratulate Tung, extending to him an invitation to visit London.

Speaking in Cantonese, Tung said, "For 150 years Hong Kong has been a colony. Now we are masters of our own household."

Xinhua, the Chinese press agency, released a prepared statement in typical rhetorical form, stating that "The compatriots living in Hong Kong, which has been under the colonialist rule of Britain for 150 years, (have) entered the political arena with great enthusiasm." The statement continued, "In the past, there has been no democracy in Hong Kong's political life under Britain's colonial rule."

Chinese Foreign Minstry spokesman Shen Guofang elaborated that the election "...would bestow rights upon the Hong Kong people that were unimaginable under British rule." Outside the election venue, 29 protesters were arrested and detained for a few hours. However, the results of the election, which many had called in advance, did not spark widespread disruption of normal events in Hong Kong.

Once the election results were announced, shares of Orient Overseas International, said to be held in trust by Mr. Tung, gained HK$300,000,000 in value, climbing over 20% to, close at HK$5.50 per share, up from HK$5.15 at opening. Tung is reported to hold over 292 million shares in the company.


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

3. WTO Holds First Ministerial Conference In Singapore

-- by Warren S. Levine, for The Cargo Letter

DEC. 12 - The first Ministerial Conference since the World Trade Organization was formed on January 1, 1995, as a product of the Uruguay Rounds, are being held in Singapore this week.

Over 5000 representatives, ministers, delegates, political and minor government officials will deal with a number of major topics, including the touchy question of whether to admit Taipei and/or Beijing into the group of 128 member countries. Membership in the WTO is a much-coveted prize by both Taiwan and the People's Republic of China.

Taiwan has sent a delegation of twelve legislators representing not only the ruling Kuomintang, but the opposition Democratic Progressive Party and the Non-Party Alliance, armed with 6,000 copies of position papers to be distributed at the Conference.

According to the official Taiwan press agency, the papers state that the accession of Taiwan is essential to the WTO if it is to be a complete organization. Taiwan is the world's 13th largest trading nation, comprising 2% of international trade.

Other items looming large on the agenda include child and forced labor, workers' rights, foreign investment and uniform trade treatment of national and foreign entities. Implementation of uniform treatment by the member states would eliminate government subsidies for domestic products which by nature discriminate against foreign competition.

An agreement on uniform practices would also eliminate export subsidies, dumping and countervailing duties.

The choice of Singapore as the host of this initial meeting of the governing body of the WTO, is very symbolic in that it is a duty-free port and arguably one of the most developed nations in the world. Singapore's economy is largely dependent on high-tech and value-added services.

Singapore's Prime Minister Goh Chok Tong opened the Conference by saying that " trade is the best means to elevate the global standard of living."

Of great interest to the transportation industry will be the discussion on the General Agreement on Trade in Services, another product of the Uruguay Round, which seeks to level the playing field for foreign and home-grown transportation service providers.

Deregulation of the maritime industry worldwide, including and maybe especially, to and from the United States, would be an essential part of any agreement in that regard. Meetings on intellectual property rights, financial services and telecommunications are also scheduled as part of the five-day Conference.

In addition, an important agreement expected from this series of meetings is the elimination by the year 2000 of all tariffs on computer hardware and software, and products for the telecommunications industry. The United States and a number of other developed countries are in favor of faster-track elimination of duties than are some of the lesser-developed nations, who have requested more time in order to catch up with the more advanced economies.

4. Creative Cargo Covers

-- by Mike Girouard for The Cargo Letter

London - 10 Dec. -- In today's world of sophisticated international trade it is increasingly the case that loss from lost or damaged cargo can sometimes exceed the value of the shipment itself. There can be additional financial (or consequential) losses involving extra costs and expenses, loss of profit, contract penalties, liquidated damages, lost sales contracts, etc. if a shipment arrives late or nor at all.

The London insurance market has always been equipped to respond to situations where the value of the cargo is only part of the exposure. Insuran ce can be effected which will address the financial consequences of delay or non-arrival.

EXAMPLES: 1.) key project equipment which, if late, will delay the completion of the project; 2.)fahsion items which must arrive by a certain date to guaranty shelf / rack space; 3.)exports to foreign countries which, if delayed, may miss quotas or be charged higher import duties; 4.)commodities which, if late, force the seller to purchase on the spot market for a higher price to satisfy a buyer.

Many of the financial exposures covered by international trade protection insurance are considered to be trading risks but are actually insurable risks. The key question to be asked on any shipment is, "What happens if it arrives late or doesn't arrive at all?" Sometimes the adherance to a delivery date isn't all that important. Sometimes it is critical.

There doesn't even have to be any physical damage to the cargo to trigger this type of insurance. Pure delay can be enough. The delay can be the result of events at the premises of the supplier (strikes, fire, etc.) OR events which cause delays in the transit (earthquake, volcano, port strikes, damage to the conveyance, slow steaming, political events) and many other reason.

Another type of insurance which can be very valuable is War On Land Insurance (WOLI). Land-based war is an absolute exclusion in every cargo or property policy. WOLI provides that excluded coverage for interests in foreign countries where cross-border war, civil war, terrorism, etc. are always possibilities to be concerned about. It can cover the inland transit of goods. It can also cover buildings and equipment, stocks, machinery, etc.

[Mike Girouard is a senior member of TYSER & CO is London's oldest Lloyd's broker (established 1820) and has long been a proponent of this kind of insurance. Contact: 12-20 Camomile Street, London EC3A 7P,England. Phone: +44 (0)171 623-6262 Fax: +44 (0)171 621-904 e-mail:

5. Freight Forwarder Trade Briefs


OUR "B" Section: FF World Air News

6. FF World Air Briefs


OUR "C" Section: FF World Ocean News

7. Attack Of The Giant Snails ! ! !

-- by Robert Conway, Esq. for The Cargo Letter

Sydney - 12 Dec -- Know as the "GAS Plague" in certain circles, a Giant African Snail has caused more than a few problems for goods moving to Australia from certain South East Asian ports. It is reported that some carriers are refusing to accept cargo for this lane because of arrival difficulties with the Australian Quarantine and Inspection Service which will inspect & fumigate all inbound containers. Inspections include: 1.) all 8 containers surrounding an on-deck CTNR, or 2.) all CTNRs in a ship's hold containing cargo from a port such as Cebu. After inspection a formal fumigation will be conducted. At least one shipper had a charge assessed of A$60,000.00 in respect of 4 containers which needed attention.

These steps to avoid the "Giant African Snail" pest from migrating "Down Under" are obviously costly, but it has been proposed that fumigation of all such cargo at origin, and issuance of a Phytosanitary Certificate might become an acceptable, future fix. Major ports such as Manila, Singapore & Port Klang are currently exempt from inspection. Entry of the pest could devistate Australian agriculture.

[ Robert Conway is a noted transportation attorney at the Sidney firm of Conway & O' ]

8. Anti-Rebating Certification for 1997/1998

-- by James Devine, Distribution-Publications,Inc.

By now every carrier and forwarder registered with the FMC should have received a letter from the FMC on this subject. Current certifications expire on December 31, 1996 and must be renewed. The FMC was to mail each registered carrier and forwarder the form to be used to prepare Anti-Rebating Certifications for 1997/1998 with a pre-printed label containing organization number, name, and registered address. We urge you to check your mail for this form.

The Anti-Rebating Certification is a very important document. It must be prepared accurately and filed timely with FMC. Carriers who fail to file it timely risk tariff cancellation by FMC. Any Forwarder who fails to file timely risks cancellation of its FMC license. The organization name, number, and registered address shown on the Certification must agree in all respects with tariffs, NVOCC bonds, and forwarder licenses. Carriers operating under d/b/a names must indicate these on their Certifications as well. The Certification must be signed by the Chief Executive Officer of each organization, and witnessed by a Public Notary. Also, each carrier and forwarder must attach to its Certification a description of the details and measures instituted to prohibit the payment or receipt of illegal rebates.

If you do not receive FMC's mailing on this matter, a copy is available by e-mail to Distribution Publications Inc. to . They will send it to you by fax, and help you prepare & file your Certification correctly.

9. FF World Ocean Briefs


OUR "D" Section: FF in Cyberspace

10. FMC Web Site Launched

-- by James Devine, Distribution-Publications,Inc.

The FMC's site on the Internet's World Wide Web was recently launched, as maintained by the Internet Services Group of the US Government Printing Office. The site provides useful summaries of FMC's functions, FMC Offices and Bureaus, and public information available. The full text of FMC regulations as issued in 46 CFR is provided , as well as commonly used FMC forms in WordPerfect 6.1 format. The best feature of the site is its detailed information on how to communicate with Commission staff.

Here is an FMC e-mail list for your files:

FMC Bureau of Enforcement - Area Representatives:
  Los Angeles - Oliver E. Clark:
  Miami - Andrew Margolis:
  New Orleans - Alvin N. Kellogg:
  Seattle - Michael A. Moneck:
Office of the Secretary:
  Secretary - Joseph C. Polking:
Office of Informal Inquiries and Complaints and Informal Dockets:
  Director - Joseph T. Farrell:

[Courtesy......Distribution-Publications,Inc.  Visit their transport web site
for updates on FMC activities at.....

11. The Cargo Letter "Cyber Ports Of Call"

This week's featured destination ports in cyberspace....


OUR "E" Section: The Forwarder/Broker World

12. Written Notice of Cargo Loss & Damage In Ocean Transport

-- by Charles Veigel, Esq. with Michael McDaniel, Esq. for The Cargo Letter

Seattle -12 Dec -- This is the first in a series of articles discussing notice and claim requirements for cargo loss & damage. This article will discuss notice of loss and damage & claim filing requirements for ocean claims under U.S. law. Subsequent articles will discuss notice requirements for air, motor carrier, rail, multi-modal transport, NVOCCs and freight forwarders.

When referring to the maritime transport of goods, we will concentrate from the time the goods are loaded on board the ocean carrier to the time they are discharged from the vessel. This period has often been referred to as "tackle to tackle", referring to the ship's unloading equipment.

The Carriage of Goods by Sea Act (COGSA) 46 U.S.C. App. 1300 et seq. was adopted by the United States in 1936 to govern the rights and responsibilities of carriers and shippers of goods by sea. Unlike the Warsaw Convention for international air transport, COGSA does not require a written notice of claim, only written notice of loss or damage.

WRITTEN NOTICE OF LOSS. The written notice of loss must be provided to the carrier or carrier's agent at the port of discharge. If the loss or damage can be readily seen, the written notice must be provided before or at the time of removal of the goods into the custody of the person entitled to delivery. If the loss or damage is not apparent, written notice must be given to the carrier or carrier's agent within three (3) days of delivery. Failure to provide such notice is not fatal to a claim, but it does create a presumption that the goods were delivered in good order. You must then overcome the burden by demonstrating that the damage occurred before delivery.

WHY SUCH A SHORT TIME? (1. The carrier must be given an opportunity to investigate the circumstances of the loss or damage; (2. to avoid fraudulent claims.

CONTENTS OF WRITTEN NOTICES. Although there are no statutory requirements for the contents of written notices, shippers/consignees should provide the following details to the carrier or its agent:

(1)     Name of Shipper
(2)	Name of Consignee
(3)	Bill of Lading Number (copy of bill of lading)
(4)	Vessel Name and Voyage
(5)	Date shipment Delivered to Carrier
(6)	Place of Delivery
(7)	Port of Loading
(8)	Port of Destination
(9)	Description of Goods
     (A) Description of Goods Lost or Damaged
     (B) Brief Statement of Lost or Damaged Goods
     (C) Damage Amount, if known

The notice of damage may be simply written on the bill of lading or on the receipt upon delivery. Separate written notice should be sent by certified or registered mail, return receipt requested or via courier to the carrier or its agent, to the forwarder, to the all involved........always receiving a return receipt.

WRITTEN NOTICE OF CLAIM. Although not mandated by COGSA, ocean carriers will require specific information in processing the cargo claim. The notice of cargo loss or damage will not be sufficient to process your claim. If the claimant does not receive instructions from the carrier specifying the necessary documentation to process the claim, the shipper/consignee/agent should submit the following documents in support of the claim: survey, bill of lading, commercial invoices reflecting value of goods, packing lists, certificate of origin, pre-shipment survey, a statement of the loss or damage and documents supporting the post-claim sale or salvage value of the goods. Note: It is highly suggested that no sale/salvage occur until BOTH the carrier and the cargo underwriter have had an opportunity to inspect.

WRITTEN NOTICE TO CARGO INSURANCE UNDERWRITER. Do not forget to notify the cargo insurance underwriter in writing. An earlier article in this series outlined each of the specific requirements for providing notice of loss under a cargo insurance policy and the various claim requirements involved. Please visit The Cargo Letter World Wide Web Site and review our article in edition [301].

REVISIONS TO COGSA. One further point, as many of you may be aware, COGSA may soon undergo revisions. The time requirements in providing notice of loss will not likely change. However, the drafters have carefully suggested to the U.S. Congress exactly to whom notice should be provided, the contracting carrier or performing carrier. You should be concerned that one important change will be to DOUBLE the per package damage limitation to US$1000. Watch for important changes to the current law.

Next in domestic and international air transport.

[Charles Veigel practices transportation law at the Law Offices of Brusanowski & Veigel, Seattle, Washington.] [an error occurred while processing this directive]