THE CARGO LETTER [308]
Air & Ocean Freight Forwarder - Customs Broker News
25 November 1996
Good Monday Morning from our Observation Deck...... overlooking the
officially designated "Cargo City" area and....... Runway 25-Right at
Los Angeles International Airport. We have Pirate news today 1
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INDEX to The Cargo Letter:
- OUR Top Story
- U.S.-CHINA TALKS MOVING FORWARD SLOWLY
- BUT LEADERS' MUTUAL VISITS PLANNED
OUR "A" Section: FF World Trade, Financial &
Inland News
- Freight Forwarder Trade Briefs
OUR "B" Section: FF World Air News
- FF World Air Briefs
OUR "C" Section: FF World Ocean News
- Problems Loom For Panama Canal (PART 2)
- Expert Says Commission Out Of Touch
- Cargo Damage Immunity For Canal?
- FF World Ocean Briefs
OUR "D" Section: FF in Cyberspace
- Int'l Air Cargo Shipment Tracking Via The Internet
- Multiple Carrier Tracking
- Free - For The Moment
- The Cargo Letter Web Sites Of The Week
OUR Top Story
- BUT LEADERS' MUTUAL VISITS PLANNED
--- by Warren S. Levine for The Cargo Letter
Nov. 22 --- Many differences were aired at this week's meetings in Beijing
between US Secretary of State Warren Christopher and top Chinese officials, but
progress is being made to heal the rift which has been growing between the two
powers since China's military exercises in the Taiwan Strait last March.
Christopher has already announced his resignation as Secretary of State, but
that will have no effect on US policy towards China, according to Assistant
Secretary of State for East Asian Affairs Winston Lord, who has also announced
his resignation.
"The Chinese know that our policy is determined by the President,
although Secretary Christopher has played a crucial role in that, and that
therefore there will be a continuity in our policy, no matter whom the successor
to Secretary Christopher is," Lord said in a briefing last week.
Setting the stage for Sunday's meeting of Chinese President Jiang Zemin and
US President Clinton at the APEC conference in Manila, Christopher stated that
"useful progress" had been made in his talks with Jiang, Premier Li
Peng and Foreign Minister Qian Qichen.
Major differences still remain between the two, including the Taiwan issue,
nuclear nonproliferation, human rights and other areas of conflict. While
Christopher accused the Chinese of blatant human rights violations, Qian issued
a heated reply that this is "an internal matter."
In a news conference in Beijing, Qian announced, "The question of Taiwan
is the core issue of Sino-American relations. If (the issue) is well-handled,
then the relationship can grow smoothly. If mishandled, then our relationship
will be subject to disruptions."
One of the topics of discussion, according to a report in the Chicago
Tribune, was to be the issue of Hong Kong's reversion to Mainland control.
However, a spokesman for the Chinese delegation said, "There is no need to
talk about this issue with any foreign power."
A positive product of the meetings in Beijing was the reported setting of
summit meetings next year between Clinton and Jiang in both Washington and
Beijing. The timing of the meetings was not announced, however a preliminary
announcement is expected sometime after the APEC meetings in Manila.
Editor Note: 5,700 Chinese troops, along with warplanes & naval vessels,
will enter Hong Kong immediately after the territory returns to Chinese rule on
1 July, 1997. People's Liberation Army troops will enter Hong Kong via the
Huanggang border checkpoint from neighboring Guangdong province at the stroke of
midnight, and air force jets will simultaneously land at the Sek Kong air base,
while PRC warships travel through Victoria Harbor. This according to sources.
Good night, Your Majesty. McD
OUR "A" Section: FF World Trade, Financial & Inland News
- China To Reduce Tariffs...........in a move to increase support for
its entry into the World Trade Organization (WTO), China plans to announce
at the Asia Pacific Economic Cooperation forum summit in December 1996 that
it will cut its tariffs from a current 24% average to 15% by the year 2000,
according to senior Asian diplomatic sources. The 1996 deficit with Japan
was still higher (US$34B) through September, but for 3 months this year the
deficit with China was higher ($29B so far this year, up 14% from last
year), the first time that has happened.
- But Jack Daniels Soon May Not Visit The Great Wall......as a press
release from the Embassy of China, effective 10 Dec.1996, says China has
decided to "temporarily suspend import of some textiles, agricultural
and animal husbandry products, fruits, alcoholic drinks and beverages from
the U.S."......in response to U.S. trade action.
- Intercargo Insurance Co. Achieves Global Reach........as quality
leader Intercargo announced premium from int'l points of distribution
totaled US$4.7M or 8.8% of total premiums for 1996 to date. Chairman James
R. Zuhlke said that "Despite the significant investment required to
establish a greater int'l presence, we are encouraged that the development
of these [overseas] offices is progressing consistent with our
expectations." Look out TT Club!.........the "Forwarder &
Broker Insurer" has expanded with an international service network,
supported by the only attorneys in the business who truly specialize in
problems of the air & ocean FF/CHB.......and their customers.
- LEP North America Acquired............by International Logistics
Ltd., an investment affiliate of William E. Simon & Sons, LLC &
Oaktree Capital Management, LLC., which earlier acquired Bekins Company this
May. LEP North America is one of the leading domestic and international FFs
with estimated 1996 revenue of US$510M. Int'l Logistics Ltd is expected to
generate US$1B this year.
- Expedited Split...............as Seattle based Expeditors Int'l has
announced a 2-for-1 stock split effected in the form of a stock dividend to
be paid to shareholders of record as of November 25, 1996. Shares now number
24,204,504 as a result of the stock dividend. Third quarter net earnings
increased 53% to $7,680,000 and were up 37% for the first 9 months of 1996.
- Fritz Companies Opens New Euro Hub.............with a Temse,
Belgium 105,000 sq. ft., full-service European Logistics Center (16,000 sq.
ft. of temperature controlled space) supported by advanced information &
communication systems, located near highways connecting the Port of Antwerp
and the Brussels Airport as well as near the intersections of arteries
providing direct access to France, Germany and the Netherlands. Also this
month Fritz acquired Fred. Olsen Spedisjon A/S which was founded in 1918 and
is currently one of the largest forwarding & logistics companies in
Norway.
- DAHER Golden Eagle Revenue Up.............. 17.8% gross and 29.2%
net for Sept. over same period in 1995.
- Americans Speak On Trade Pacts.........as a new poll by the Bank of
Boston shows 5% of U.S. citizens believe that free trade pacts cost U.S.
jobs and 57% oppose any new trade agreements with Latin America. An even
larger 73% want labor & environmental issues negotiated as part of any
new trade accords.
- Greenbrier Sees Intermodal Decline Temporary.........as it reports
intermodal loadings to have improved this year. The Lake Oswego, Oregon,
supplier of rail cars reported a 43% increase in 4th quarter earnings, with
a back log of 2,200 rail cars valued at US$123M, as compared to 2,700 rail
cars valued at US$165M in May 1996.
- Watching Your Freight............ in commercial vehicles &
containers, or knowing the location of will soon be available to anyone who
has Internet access and MIRAS, a tracking and remote control system from SPS
Technologies, Fort Lauderdale. MIRAS -- Mobile Interactive Remote Activated
Solutions -- is an interactive tracking & remote control device that
allows users to know the position of their vehicles, monitor vehicle
functions like cargo temperature, and even control vehicle functions such as
turning the engine on and off, or unlocking the doors. The device notifies
you when the vehicle's security system is triggered, providing an immediate
opportunity to stop the crime while it is in progress. Utilizing Windows 95
& Windows NT, it tracks and controls vehicles via cellular and 220 MHz
radio communications. Contact the company at (800)320-1186 or MIRAS@Shadow.net......or
visit the web site.......... http://WWW.MIRAS.COM
- Russian "Unofficial" Up.............. as unofficial
trade, or foreign trade carried out by private individuals, has accounted
for 12% of overall trade turnover, up 30% over 1995, to US$ 8.3B. Poland,
Turkey and South Korea are the favorite spots for individual Russian
traders, know as 'ch elnok' or 'shuttle traders'.
- Yellow Freight Goes Up.................. with a general freight
rate increase averaging 5.2% effective Jan. 1, 1997........and also a $10
charge to adjust freight to proper weight & classification on the
freight bill. A $10 fee will be applied to the freight bill when an error in
weight or classification occurs and the result adds $20 or more to the cost
of moving the freight. You can complain at the new Yellow Freight web site
which promises "live chats" with president Bill Zollars and other
key executives...... http://www.yellowfreight.com
- The Freight Connection Comes West...........adding an L.A. office
to existing, ISO 9002 certified stations at Tampa and Melbourne, Fla.;
Atlanta; Cincinnati; & Toronto.
- The Fur Will Fly...................or perhaps be trucked as the
Anima l Transportation Association (AATA) has announced dates for its 23rd
Annual International Conference, themed "Business in a New World",
to be held March 16 - 19, 1997 in Santiago, Chile at the Holiday Inn Crowne
Plaza. For information call+01 713-443-4595, or e-mail 100257.1720@compuserve.com.
- Palestinian's Arrested For Their "CULTURE"...........as
Louisville, KY, authorities took two into custody this month for importing
cocaine ...... until the crime lab confirmed the white substance seized was
actually fist-sized chunks of dried yogurt.
OUR "B" Section: FF World Air News
- FF ALERT: More ValuJet Changes..........as 6 months post crash the
FAA is moving to require fire detectors & suppression systems in airline
cargo holds, including retrofit of 2,800 older airplanes, and to ban them
from carrying oxidizing materials that can feed fires. Substances will now
include hydrogen peroxide bleach. Additionally, the FAA will hire 118 new
employees for its HAZ MAT program, including 110 inspectors.....for a new
total of 410. FAA security chief Bruce Butterworth said this week, ``You're
going to see some of the biggest criminal cases you've ever seen.''
Butterworth didn't say who would be targeted in any criminal cases, but
previous testimony from FAA indicated those facing charges could range from
the shipper of the materials to plane loaders, if they have knowledge it was
illegal. The Countryman & McDaniel law firm at LAX is currently involved
with certain of these new criminal cases.
- The FedEx Fix............for Haz Mat compliance is now available to
you free of charge by way of free seminars to be conducted throughout the
U.S. Sign up your employees NOW. Consult the FedEx directory or read about
the program at the FedEx Dangerous Good Seminar world wide web page...... http://www.fedex.com/danger-goods/overview.html
- United Back In Freighter Biz............ more to our recent The
Cargo Letter story about conversion of UAL planes to dedicated
freighters.......it is reported that UAL DC1030F service could soon be seen
ORD-LAX/OSA/TPE/MNL and FRA/JFK/ORD & ORD/JFK/FRA. United is obviously
now planning in more global terms. Since cabotage prevents foreign carriers
from moving cargo domestically within the US., many foreign carriers
allocate space on their cargo aircraft for their US transit stations......we
will see more code sharing amongst US and Foreign carriers especially over
US domestic routes.
Code sharing provides better utilization of freighter aircraft by trying
to keep full on all segments. Air-cargo Code shares would be very beneficial
to carriers like Delta, TWA, American, US Air [now US Airways] since cargo
carried by these carriers is either trucked or flown in belly compartments
of passenger aircraft. Belly space availability on a passenger aircraft is
dictated by passenger volume and restricted by lower deck capacity. Code
share's with foreign carriers with pure freighter aircraft will become more
popular in the very near future, as has been understood by United.
- FORTUNE Magazine Names Mercury Air ................one of America's
Top 100 Fastest Growing Companies (Oct. '96 issue). Cargo revenues increased
68.7% for the quarter.
- DOT Gives UPS & Polar Philippine Nod.............. by
tentatively selecting UPS & Polar Air Cargo to provide new scheduled
all-cargo air service between the U.S. and the Philippines. Currently,
Federal Express is the only scheduled U.S. all-cargo carrier in the market.
This month Polar too k delivery of its first Boeing 747-200F series
aircraft, bringing its total fleet to 14 B747 aircraft.......and is the 4th
largest U.S. carrier providing trans-Pacific all-cargo services
- Air France Roars Back............with first profits since the
company neared bankruptcy in 1994..........plus US$160M for the 6 months
ending 30 Sept. 1996.. Cargo volume increased 6.7% for the period
.............which included a record 1.5 million bottles of 1996 Beaujolais
Nouveau weighing in at 1,200 tons!
- A 30th Anniversary For JAL............as it was 3 decades ago this
month that JAL began service to JFK via San Francisco & Honolulu to
Tokyo, using a 129 seat DC-8-50.
- U.S. and U.K. Resume Aviation Talks.............as negotiators hope
to resume formal discussions on an "Open-Skies Aviation Agreement"
next week. The pending departure of U.S. Transportation Secty. Federico Pena
could speed an agreement.
- Unmanned Space Freighter...............is not science fiction, but
a Soyuz-U rocket launched from Russia's Baikonur spaceport with 2 tons of
holiday gifts, food & supplies for the Russian-American crew on the Mir
space station. The fliht had been postponed 3 times due to Russian money
woes.
- Its Chile At Burlington................ with purchase of its long
time network partner, O.I.S.S.A., the leading export forwarder in Chile.
- Atlanta Becomes Gateway South............as Martinair Cargo will
begin service from Atlanta to Latin America (Ecuador and Costa Rica) this
month with direct service twice weekly, on Wednesday and Thursday to Quito
and Guayaquil, Ecuador and Friday to San Jose, Costa Rica utilizing the
modern MD-11 freighters. Emery Worldwide opened its 10th regional "mini
hub" in Atlanta this week, with the capability to handle over 500,000
pounds of freight per night. Hartsfield Int'l Airport's cargo tonnage
increased by 11.3% in Sept.1996.........although mystery continues under
investigation for the perishable commodities facility. Some 20% of the
facilities' 32 degree cooling area has been rising & sinking as much as
2 inches below the concrete slabbing. As a result fork lifts, etc. can not
be used in the area.
- COSCO Can Fly............ as PRC's China Ocean Shipping Co. has
opened Shanghai COSCO International Airfreight Co. Ltd. This could be a
story to watch.
- Boeing Will Stretch Itself....................with design of the 757-300
as a simple stretch of the Boeing 757-200. The airplane will look different
at 178 feet, 7 inches ............. 23 feet, 4 inches longer than the
757-200, but will be able to carry 50% more cargo. Due to its increased
length, the 757-300 will be equipped with a retractable tail skid.
- Arrow Air New Houston Office............will serve its new Houston
-Lima route authority with daily road-feeder service linking
Houston/Dallas/Fort Worth/New Orleans, with Miami, where the cargo can be
transferred to Arrow flights serving Peru, Ecuador, the Caribbean, etc.
OUR "C" Section: FF World Ocean News
- Expert Says Commission Out Of Touch
- Cargo Damage Immunity For Canal?
Editors Note: Today The Cargo Letter presents the second editorial
installment from a highly placed, career employee of the Panama Canal
Commission. Due to the controversial content, our source must currently remain
anonymous. Reader comments are welcomed.
The Canal Zone - 20 Nov--The proposed 17% toll increase for the Panama Canal
is only the beginning of the future escalating costs shippers will have to bear
to use this historic waterway. There is a simple strategy now being considered
by the Canal that will increase costs to everyone through higher insurance
premiums.
All vessel accidents in the Canal are investigated at the local level by the
Board of Local Inspectors. It is an opportunity for the Canal to determine who
is at fault - the vessel or the Canal. Naturally, if the Canal is at fault, they
will pay the damages to the vessel owner. Part of every toll paid is supposedly
set aside for this purpose, but only for minor damages. Larger costs cannot be
borne by the Canal, and end up being paid by the U. S. Government. Few taxpayers
know they subsidize the Canal in this fashion.
In an effort to relieve the Republic of Panama from this future burden, the
Canal Commission has determined that the transit pilots must be changed from
having control of the navigation of the vessel to merely "advisor"
pilots. Since the pilot will only be in an advisory capacity, the vessel's
Master will have control, and accidents to his vessel will have to be borne by
the vessel. Not only will the price of insurance premiums rise, but the shipping
companies will be forced, in some instances, to look for more expert (costlier)
crews.
Finally, the future toll increase is requested in order to enhance the
efficiency of the Panama Canal - ostensibly to increase the number of ships
transiting per day. This will be difficult, if not impossible, when the Canal
removes control from the pilots. It only takes one recalcitrant, less than
efficient shipmaster to destroy the sought after improved efficiency.
- Trade Grows - More Slowly......... as the United Nations Conference
on Trade and Development World says, in its annual report on maritime
transport, that seaborne trade is expected to grow by 3.0% to 3.5% this
year, reaching nearly 4.8 billion tons, a slight decline from last year's
growth rate of 3.7%.
- U.S. Naval Station Long Beach..........will now fly COSCO's flag as
the PRC carrier has won Port of Long Beach approval for a new 145.3 acre
terminal, at a yearly lease cost of US$14.5M starting in 1998, including 6
cranes with a minimum reach of 18 CTNRs to service 6,000 TEU capacity
containerships. We shall dearly miss the now closed L.B. Naval Station, once
proud Home Port of the U.S. 7th Fleet. A lawsuit has been filed to preserve
the area as a historical site & park.
- OVER CAPACITY ALERT: Yangming Joins Rush To Expand Capacity.........
.......and is set to follow the newbuilding plans of most other major global
carriers by ordering five 5,000 teu containerships totalling US$300M for
service in 1999. More downward pressure on rates is seen by The Cargo
Letter................for example ...............In the words of DAMCO
Maritime's Marcus Wiedemeier, "Somebody went crazy building 6500 teu
ships - they look at the fact that such a ship needs only about the same
amount of fuel as a much smaller one. You would be able to ship twice the
cargo at the same price, not to speak of other savings. This advantage has
already been passed on to the market and shippers today pay half the price
they where paying just a few years ago. The freight erosion (freight savings
for the shipper) from Jan. to Nov. this year reached at least 25% in the
Container trade Europe-Far East. Already in January the rates were low, how
is it possible to continue surviving"? Marcus poses a good question
indeed.
- FMC Proposes Port Sanction For Japan......in the nature of a rule
to impose US$100K fines on Japanese vessels calling at U.S. ports for an
estimated total of US$3M per month, in response to apparent unfavorable
conditions in the foreign oceanborne trade between the U.S. and Japan. The
FMC states that the rule will be to adjust countervailing burdens on
Japanese carriers. The fines apparently will continue until U.S. lines are
allowed to open terminals in Japan.
- Pirate News Of The Week.......includes......M/V San Marino a 1,334
TEU containership boarded by at least 10 armed pirates on 15 Nov. in a
"safe area" near Rio de Janeiro, Brazil. MORE.......the 5K ton
Malaysian M/T Suci w as seized 18 Nov. by gunmen east of Singapore with most
of her crew set adrift. The 2 engineering officers & the vessel remain
missing. Some of the crew managed to tear off their blindfolds before the
ship sailed away. They saw that the pirates had changed the ship's name to
M/V Glory II, registered in San Lorenzo, Honduras. Anyone with information,
please Fax +60 3 238 5769.....and.......Encourage your customers to buy
marine cargo insurance.
- Big Apple Gains From West Coast Costs......... as cargo volumes at
the Port of New York and New Jersey in the first half of 1996 increased by
18% over last year. Trade with South-East Asia was the major growth corridor
for the period with 10% increase in port volumes and a market share increase
of 2%. Sources attribute much of the change to increasing West Coast port
handling charges ..........and shipper awareness that the cost of direct
East Coast delivery over use of West Coast land bridge service......is
equalizing.
- Circle Int'l Has Acquired...... Trans International Groupe
("TIG"), a Minneapolis-based ocean freight forwarder.
- APL Opens China Intermodal Center.............. its first
rail-based intermodal container service to a major inland Chinese industrial
center, the northern city of Harbin, from Port Dalian, with 26 day service
to New York. A PL pioneered service between the U.S. & China 130 years
ago......in 1867.
- Germany To End Ship Subsidies.......... for vessels under its
registry. US$67M was budgeted for 1997 but has been cut as Germany moves
towards European integration.
- Taweelah Will Be New Emerates Port............ about 80
kilometers/50 miles from Abu Dhabi, the 24 crane port will open in about 2
years.
- K Line & Yangming Add Haifa..........to their fixed-day, weekly
Europe-Asia service, eastbound.
- Far Eastern Freight Conference (FEFC) Pledge....... as the lines
pledge to restore rates from January 1, 1996, after 11 months of continual
rate decreases. We will see.
- Lost With All Hands............as Panama flagged, general cargo M/V
Cordigliera went down in bad weather off South Africa last week with her
entire crew of 29..............meanwhile, M/V Guernsey Express with 1,600
Australian cattle aboard sank in Typhoon Dale off Guam. Encourage your
customers to buy marine cargo insurance
- Hapag-Lloyd Marches Toward Retail.......... with opening of a sales
office in Kansas City, Mo., to serve western and central Missouri and
Kansas.
- A Silent Witness To Contain Pilferage?..........is promised by U.K.
's Spector, a an instrument that records the time and date on which a
container has been opened so that you can tell where it was broached; helps
you find out who did it. No bigger than a 35 mm film cartridge, the device
comprises a digital clock & photoelectric cell which stops the clock
when exposed to light. Its battery lasts for three years. Given the MAJOR
industry /insurance/legal problem of determining exactly where loss has
occurred, this device could save millions of dollars and lower insurance
rates. [Contact Spector (UK) Tel/Fax +44 1903 265665.]
OUR "D" Section: FF in Cyberspace
- Multiple Carrier Tracking
- Free - For The Moment
Washington D.C. - 9 Nov. -- Logistics Management Systems and Trade Compass
have announced an Internet-based int'l air cargo shipment tracking system. The
Air Cargo Tracking System enables international shippers to instantaneously
verify freight location using the airway bill number and returns data including
departure & flight info and confirmation of delivery. The service will
eventually expand to 60 carriers, but currently tracks a few, including
American, British Airlines, Canadian, Emirates and Quantas. Pr esently available
for free, a future pay service will emerge as new carriers are added. (E
-mail.......wmcfadden@tradecompass.com).
http://www.tradecompass.com/lms/air.html
1997 Harmonized Tariff Schedule (HTS) of the U.S. (on the Internet for
downloading......BUT NOT YET READY IN PRINT)
http://www.usitc.gov
Air Forwarders Association
http://www.logcity.com/airfwdrasn
CF Motor Freight (New tracking & pick up for Int'l freight)
http://www.cfwy.com
International Shipping Exchange (This paid site can save time & money,
with several tasks automated online, including 1.) Prompt Vessel Schedules, 2.)
Automated Bookings, 3.) Automated Rolls. No more wasting time looking up
schedules or waiting on hold in while making bookings/rolls.)
http://www.newpaper.com/shipping
Transportation 2000 (a very interesting site)
http://www.la-freight.com
Up To Date U.S. Customs Rulings
http://www.customs.treas.gov
U.S. Xpress (Customer freight tracking, EDI)
http://xconnect.usxpress.com
TWA Flight 800
Memorial @ NYSTATE.COM
http://www.nystate.com/index3.html
Comprehensive Technical Analysis
http://deepseeker.com/jo/twa800.html
Missed The Dubai Air Cargo Conference? Try The Archive.
http://www.cargo-online.com/acf/ACF-Dubai96-airports-regional-econ.html
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