Law Offices of Countryman & McDaniel
Air & Ocean Logistics - Customs Broker News
 30 October 2013


Good Wednesday Morning from our Observation Deck......overlooking the officially designated "
Cargo City" area and...... Runway 25-Right, at Los Angeles International Airport, voted "Best Cargo Airport in North America."

The Cargo Letter is now perfectly designed to be enjoyed on your iPad.  Access all our internet links directly from your device.

       Here is what happened in our industry during the Month of October 2013, and we have filmed remarks from Capt. Richard Phillips, master of the 
M/V Maersk Alabama.

        To help you find what you need -- 
FAST -- there's now a transport search engine installed at our www.CargoLaw.com website!

       Contribute your knowledge, stories & company information.......by e-mail to 
The Cargo Letter.  We strive to bring you useful information which is timely & topical.  Be sure to visit our website.......http://cargolaw.com
       Archive of 
The Cargo Letter ....... www.cargolaw.com/cl-archives.php
       Michael S. 
McDaniel, Editor, Countryman & McDaniel, forwarder/broker, hull & machinery attorneys at LAX.

The Cargo Letter:
OUR "A" Section: Trade, Financial & Inland News***
Freight Forwarder Trade Briefs ______________                            
The Cargo Letter Financial Page ______________                               
OUR "B" Section:  FF World Air News***
Freight Forwarder World Air Briefs ____________                         
OUR "C" Section:  FF World Ocean News***
 FF World Ocean Briefs _____________________                                            
The Cargo Letter Cargo Damage Dispatches _____        
       **Back By Popular Demand**
OUR "D" Section:  FF in Cyberspace***
The Cargo Letter "Cyber Ports of Call" _________ 
 New U.S. Transport Related Legal Measures ________  
    MAP-21 Enforcement Grace Period Announced -- details of the mandatory new U.S. law                           


OUR "A" Section: Trade, Financial & Inland News***
Freight Forwarder Trade Briefs _____________ 

   ***Asia Growth 2013 Continues ....... as aside from regional trade, Asia has enjoyed a year-on-year 5.4% increase in exports to the rest of the world in the first half, according to UK-based Box Trade Intelligence. Asian exports to the Middle East and Indian subcontinent scored highest with 12% growth while trade to North America increased 2.4% and to northern Europe was up three per cent in the first half. Despite the improvement, the gap between supply and demand remains and this is likely to further weaken rates, said the report. "As more of the larger ships come on stream it is inevitable that rates will remain depressed. However, the economies of scale these new ships offer are so powerful that they will ride out the inevitable depression over the short term," the report said.
Learn More About Box Trade Intelligence

    ***Aisia Bellwether? .......as the number of exhibitors at the autumn session of the Canton Trade Fair has fallen the most since 2009 because of a subdued global economy and weaker currencies in key markets. The twice-yearly Canton Fair, held in three gigantic conference halls in eastern Guangzhou, is a gauge of the mainland's export performance in the following 6 to 9 months, according to Hong Kong's South China Morning Post. Only the leading companies or the companies that have their own branding could survive this tough economic situation, according to Guangzhou University economist Liu Songping. At a time when the recovery of the US economy is being undermined by concerns about the debt ceiling, the number of exhibitors at the 114th Canton Fair has fallen by 229 to 24,517, the biggest drop since 2009 downturn. "The fall in exhibitors hints that the initial recovery in the mainland's export growth will be thwarted by the uncertainty in the U.S.," said Linus Yip Sheung-chi, a strategist at First Shanghai Securities.

    ***Canada & EU Reach Trade Agreement ........ as Oct. 18, 2013, a Comprehensive Economic and Trade Agreement (CETA) was founded which will remove approximately 99% of all tariff lines between the two partners and is aimed to boost trade relations and job creation in both economies.  
Read Details of The Free Trade Agreement

   ***Australia Replaces U.S. On The Bun ...... as its red meat industry has benefited from China's ban on U.S. beef imports by registering record amounts of beef and goat meat sold to the mainland in August, according to media reports. China imported 19% of Australia's total red meat shipments, compared with 4% in Aug. 2012. Beef shipments totaled 16,192 metric tons including the product and packaging. Grain-fed beef sales to China totaled 2,259 tons, exceeding 2,000 tons for the first time. That export number is especially significant because U.S. export beef is grain-fed, in contrast to Australian beef, which is normally grass-fed. U.S. beef producers have been locked out of China, the world's largest consumer market, since Dec. 2003, when a case of bovine spongiform encephalopathy was discovered in a cow in Washington state. 

   ***Making Many Mexican Motors ..... as its auto industry will soon see a US$10Bn factory building spree with Japanese and German auto manufacturers spearheading the drive, illustrating the nation's rising economic challenge to rivals from the United States to China. BMW AG, Toyota Motor Corp and Daimler AG's Mercedes-Benz are expected to announce at least US$2Bn of deals in the next year or two, according to supplier and other industry sources. That's on top of nearly US$6Bn in announced plants by Nissan Motor Co, Honda Motor Co, Mazda Motor Corp and Volkswagen AG. U.S. automakers, all of whom have been building cars in Mexico since before World War II, will spend another US$1Bn or more to upgrade Mexican plants. And Nissan and VW also are considering expansions at existing factories that could total US$1Bn or more, according to sources familiar with their plans, reports Reuters. Mexico "is quickly turning into the China of the West," said senior analyst at Michigan-based research firm IHS Automotive, Joseph Langley, pointing to Mexico's low wages, a strong supply base and a global web of free-trade agreements. Mexican auto exports beyond North America are growing even faster than those within, according to the Federal Reserve Bank of Chicago. They accounted for nearly 30% of the 2.4 million exported last year. Altogether, Mexico built three million cars & trucks, according to Automotive News, compared with 10.4 million in the United States and 2.5 million in Canada. By 2020, Mexico will have the capacity to build one in every four vehicles in North America, up from one in six in 2012, according to IHS.

   ***Royal Mail Privatization: Shares & Strikes ...... as workers have voted to strike, a week after UK's postal service's initial public offering, which was seven times oversubscribed with more than 700,000 investors applying for shares in the state-owned postal company. The walkout will take place on November 4 unless a deal safeguarding employment is reached, according to a statement issued by the Communications Workers Union (CWU), reports Bloomberg. Sixty-three per cent of the 112,000 Royal Mail workers turned out for the vote in which 78% of the respondents voted in favour of a walkout. "Postal workers care about jobs, terms & conditions more than they care about shares," said CWU deputy general secretary David Ward. "Postal workers will not pay for the profits of private operators and faceless shareholders." Royal Mail shares were sold to investors at GBP3.30 (US$5.20) and have climbed 44% to about GBP4.73 since it started trading on the London Stock Exchange on Oct. 15. The government sold 52.2% of the Royal Mail in the biggest privatization since British Rail was sold in the 1990s, with a further 7.8% likely to be offered in the coming weeks depending on demand.

   ***True Temperature Service ...... as UPS announced new service levels for managing temperature-sensitive health care products as part of its UPS Temperature True portfolio. With tremendous global growth in the transportation of cold chain products, health care companies can now choose from tiered service levels based on the degree of control needed, leveraging both the speed of air and the economies of oceanfreight while ensuring protection in the supply chain.
Learn More About UPS Temperature Temp

    ***Panalpina Pays Class Action Fine ..... as Swiss forwarding giant has agreed to a fine of US$35M to settle a U.S. class action suit alleging price fixing air freight surcharges. "The settlement is subject to U.S. court approval and will impact the 4th quarter 2013 results," the company said in a press release. The class action suit was against air freight forwarders, including Panalpina, after U.S. Dept. of Justice (DOJ) investigations under the Sherman Antitrust Act. This case was settled with the DOJ in 2010 by entering into a plea agreement. Panalpina agreed to enter into the current settlement agreement "to avoid cost and risk of trial."

    ***Kuehne + Nagel Pharma Deal At SHA ..... as the Swiss forwarding giant has won a contract to provide Johnson & Johnson Medical China with temperature-controlled warehouse facility, covering 20,000 square metres near Shanghai's Pudong Int'l Airport. "The agreement underlines Kuehne + Nagel's expertise in developing and offering tailor-made service for the medical device and healthcare sector in China," said the company.

   ***Motor Truck Cargo Theft Risk Increasing ..... as a new report shows truck cargo theft during the most recent three-month period increased in the U.S., while the value of each incident moved higher by nearly double-digits. The logistics security services company, FreightWatch International, reports between June and August, it recorded a total of 202 thefts. The average loss value per incident during this period was US$166,454. Compared with the previous quarter, total thefts increased by 5%, while the average loss value increased by 9%. Food/drinks was the product type most often stolen in this rolling quarter. These thefts comprised 22% of all incidents. The electronics industry experienced 29 thefts, or 14% of the total, while there were 25 thefts, or 12% of all incidents, in the metals sector. California remained the state with the most thefts, with Texas having experienced an increase in incidents but holding in second place. The 46 thefts in California accounted for 22% of all incidents. Texas had 34 thefts, or 18% of the total, while Illinois reported 31, or 14%, taking the 3rd spot.
Read More About FreightWatch

    ***Shorthaul Exempt From HOS Rules ...... as the Federal Motor Carrier Safety Administration formally amended its 2011 hours of service rule Oct. 25 to exempt shorthaul drivers from taking a 30-minute rest break after eight hours of driving. The Final Rule provides an exception from the 30-minute rest break requirement for short-haul drivers who are not required to prepare records of duty status. The exception applies to: (A) all drivers (whether they hold a CDL or not) who operate within 100 air-miles of their normal work reporting location and satisfy the time limitations and recordkeeping requirements of § 395.1(e)(1).; and (B) all non-CDL drivers who operate within a 150 air-mile radius of the location where the driver reports for duty and satisfy the time limitations and recordkeeping requirements of § 395.1(e)(2). Changes to the federal hours-of-service rule topped the 2013 survey of critical issues facing the North American trucking industry, the American Transportation Research Institute reported.
Read More About FMCSA Hpurs of Service For Drivers
Read The FMCSA Final Rule

    ***ATA Sees Capacity Squeeze Ahead ...... as the American Trucking Associations chief economist Bob Costello says U.S. trucking will eventually see a capacity crunch as demand for freight services outstrips the slower growth supply of trucks & drivers. "Once we see more accelerated economic growth - think 3% - it will eventually cause very tight capacity," he said, adding that ATA's truck tonnage index was increasing faster than overall loads, a sign of recovery. Speaking at the "All Eyes on the Economy" seminar sponsored by Bendix Commercial Vehicle Systems, Mr Costello said: "Our tonnage index continues to rise, mostly because recovery in energy and construction is outpacing recovery in general economy. So heavy freight is driving tonnage even if loads are growing slower." With slow growth in loads and rising costs, Costello said fleets could see weakened margins in the near term. "While we do see tightening capacity going forward, until we get to those consistent levels of growth, margins will be under pressure because the costs of fuel, driver recruitment and retention and equipment will rise faster than freight rates," he said.

   ***Dealing With Driver Retention ...... as on Oct. 22, ATA Chief Economist Bob Costello said fleets are adjusting to continued tightness in the driver market by increasing pay & hiring newer drivers. "While the driver shortage is generally confined to only certain segments of the trucking industry," Costello said here during the "All About the Driver" General Session, sponsored by Freightliner Trucks, "it is having real impacts in how fleets recruit and retain their drivers." "Fleets in all segments of trucking have told us they are having a more difficult time finding qualified drivers than they were a year ago," Costello said. "As a result, more fleets are considering hiring drivers straight out of driver training programs and nearly 75% of those we surveyed plan to increase pay or have already done so." The industry needs to find an average of roughly 96,000 new drivers annually to keep pace with demand. If freight demand grows as it is projected to, the driver shortage could balloon to nearly 240,000 drivers by 2022, according to ATA data. 

Brown Leads The Way To LNG .... as natural gas utilization continues to be a major action item for transportation and logistics bellwether UPS, with the company announcing that it will invest roughly US$50M to build another 9 liquefied natural gas (LNG) fueling stations. This follows an April announcement by the company, when it rolled out its plan to purchase roughly 700 liquefied natural gas (LNG) vehicles and build 4 refueling stations by the end of next year. When these stations are up and running, which UPS expects by the end of 2014, UPS will have 13 LNG stations. The nine new LNG fueling stations will be based in Florida, Illinois, Indiana, Mississippi, Missouri, Ohio, Pennsylvania, and Texas. The four stations announced last April are in Knoxville, Nashville, and Memphis, Tenn., with the 4th one in Dallas, Texas, which are all under construction. 

    ***Forwarders Middle East Risk Challenge ...... as insurance coverage  will remain a problem for forwarders until the sector, particularly in the Middle East, can establish insurance compliance standards for "safe operators", said the transport insurance provider TT Club. At the UAE's National Assn. of Forwarding and Logistics (NAFL) workshop, TT warned that these demands often put an onerous risk on the forwarder, who is under considerable competitive pressure to accept liability as a carrier. Such risk can be further compounded when employing sub-contractors, because obtaining their acceptance of the same risk is difficult, said the TT Club statement. The workshop also underlined the difficulty forwarders in the Middle East region have in sourcing reliable trucking companies that are fully insured for liability risk. Until compliance is fully adopted by the region's haulage industry adequate insurance coverage for many transport operators will remain a problem, said the TT Club statement. The event held at Dubai's Chamber of Commerce was attended by some 140 representatives of the UAE's freight transport community including TT executives

   ***Moving Sharks ...... as Stockholm-based Conroute Air & Sea has handled the customs clearance and documentation for an unusual shipment of 15 blacktop reef sharks by air freight from Ngurah Rai International Airport on Bali Island, Indonesia to Haga Ocean, a tropical rain forest and aquarium in Hagaparken, Stockholm.

    ***Acute Cargo Shortage ....... as a German couple's marriage got off to a rocky start when the groom forgot his bride at a highway gas station on the way home from their honeymoon, only noticing she was missing after hours had passed. Police said Oct. 11 the couple was heading home to Berlin from France when the man pulled over near the central town of Bad Hersfeld late Oct. 10 to fill up their van. The woman had been sleeping in the back, but got up - unbeknownst to the man - to use the restroom and he drove off before she returned. Only after 2 1⁄2 hours on the road did he notice his precious cargo was gone and called police, who said she was patiently waiting. The groom is now sleeping in the garage, with the car.

   ***Tracked Down ...... as authorities say a Kansas man who was walking along railroad tracks wearing headphones was hit by a train that he didn't hear approaching behind him - but he got back up and kept walking. Shawnee County Sheriff Herman Jones says the BNSF conductor slowed down the train and blew the horn when he saw 25-year-old Kristopher Wenberg on the tracks in Topeka on Oct.10. Wenberg told deputies he couldn't hear the train, which eventually hit him. Jones says Wenberg promptly got back up and called someone on his cellphone as he walked away. He went to a hospital with cuts on his legs and shoulder. It is against the law to walk on train tracks and Wenberg would be cited for criminal trespass.

    ***Attention All Passengers...... as officials would like the person who left a stash of gold bars and a pile of banknotes in the luggage deposit at Cologne's main railway station to kindly contact German police. That was the appeal that police in the western German city issued Sept. 27, for information to track down the owner of the several kilos (pounds) of gold and a six-figure sum of euros in cash. The stash was found in April in a luggage locker at the station, a major European transport hub. Police said they're going public after being unable to link the haul to any crime and hearing nothing from any legitimate owner. Whoever the owner is shouldn't leave it too much longer. Police say that if nobody comes forward, the stash will be sold.
The Cargo Letter Financial Page ____________ 
  **Canadian National Railway (CN).
 UP with a 6.2% year-on-year 3rd quarter net profit increase to US$683.2M, drawn on record revenues up 8%.
  **Canadian Pacific Railway (CP). 
UP with a record year-on-year 47.7% 3rd quarter profit increase to US$318M, drawn on revenues up 5.5%.
  **CSX Rail. 
UP with a 1.7% year-on-year 3rd quarter profit increase to US$463M, drawn on revenues of US$3Bn, up 3%.
**Delta Airlines. 
UP as net profit for 3rd 2013 quarter was US$1.2Bn, or US$1.41 per diluted share, excluding special items, a US$444M improvement year-over-year.
**Etihad Airways. 
UP with 3rd quarter revenue of US$1.4Bn, a 11% increase year over year supported by an increase in cargo revenue of 39% to US$244M.
**Forward Air Corp. 
UP with a 15.4% year-on-year net profit increase to US$14.2M in the 3rd quarter, drawn on revenues of US$170M, up 18%.
  **Kuehne + Nagel. 
UP with a 23.8% year-on-year increase in net profit to US$485.7M.
  **Norfolk Southern Railway. 
UP with a 20% 3rd quarter year-on-year net profit increase to US$482M, drawn on revenues of US$2.8Bn, up 5%.
  **Rickmers Maritime. 
UP with a 59% year-on-year increase in 3rd quarter profit to US$13.1M.  
UP with a gross profit rise US$450.95M in 3rd quarter, a year-over-year increase of 6%. 
**Union Pacific. 
UP with an 11% year-on-year 3rd quarter profit increase to US$3.2Bn drawn on revenues of US$16.33Bn, up 4%. 
UP as 3rd quarter revenue jumped up 3.4% to US$13.5Bn, and operating profit rose 133.5% to US$1.8Bn, with quarterly earnings per share—at US$1.16—increased 9.4% and edged Wall Street analysts' expectations of US$1.15 per share. 
**US Airways Group, Inc. 
UP as its 3rd quarter 2013 pretax profit excluding net special items was a record US$367M, a US$174M, or 90%, year-over-year improvement.                            

OUR "B" Section: FF World Air News***
Freight Forwarder World Air Briefs __________  

   ***A Visit To UPS Worldport........ as it sits on 600 acres in Louisville and people call it one of the New Seven Wonders of the World. At the heart of the company's global transportation network, this sophisticated mega hub sorts approximately 416,000 packages per hour over 115 miles of conveyor belts. On any typical day, the facility unloads 1.2 million packages from all around the world and then loads the sorted packages back onto more than 130 outbound flights within just five hours.
Start Your Visit

   ***Airbus' Cargo Global Freighter Forecast  2013-2032 ...... as world-wide air freight traffic is projected to grow by an average of 4.8% annually over the next 20 years, almost doubling the required global freighter fleet to nearly 3,000 aircraft. This projected growth is driven by numerous positive global trends in economic activity, including world trade, private consumption and industrial production. The forecast shows the overall worldwide air cargo demand by the year 2032 will require around 2,700 new and converted aircraft. Over half of these will be needed for fleet replacement – driven by current old aircraft retirements – with the remainder being for growth. Of these 2,700 aircraft, 870 will be factory-built freighters worth approximately US$234Bn, while around 1,860 will be converted from passenger aircraft. A further 175 in 2032 will be aircraft which are already in service as freighters today. Belly freight usage in passenger aircraft is taken into account – which will remain largely unchanged at around half of commercial air freight on international traffic.
Read The Airbus Freighter Forecast 

   ***e-Commerce As Jet Fuel....... as it is expected to come to the rescue of the ailing air cargo sector, according to new air cargo market research from ResearchMoz of Albany, New York. Its "Global Air Cargo Market 2012-2016: Industry Size, Share, Growth, Trends And Forecast" sees worldwide air freight growth running at 5.97% a year over the forecast period. "One of the key factors contributing to this market growth is the increasing number of online retail stores," said the ResearchMoz press statement, announcing the release of its latest study. Key vendors operating in this market today are Deutsche Post, FedEx, UPS, TNT Express, Air France-KLM-Martin Air Cargo, Lufthansa Cargo and Singapore Airlines Cargo, the release said. "The global air cargo has also been witnessing an increase in new air routes. However, increasing competition from surface transportation could pose a challenge to the growth of this market," it said. In 2013, demand levels have far exceeded available capacity out of the Hong Kong market. The market has seen an influx of cargo from South China and Southeast Asia as shippers convert shipments from ocean to air, fulfill orders for highly publicized new product releases and accelerating shipments to meet holiday demand.  These factors have amplified demand levels in Hong Kong.  As a result, transit times may be impacted for shipments to the Americas or Europe as market backlogs have begun to accrue. With the holidays at hand we suggest advanced bookings be made whenever possible.
Read more about ResearchMoz And Market Trends.

   ***Bigger Planes, Bigger Bellies ...... as the glut in bellyhold capacity of more new wide-body passenger jets, such as the Boeing 770-300 ER and the Airbus A330-300, is threatening to weaken air freight demand still further, says the International Air Transport Assn. (IATA). The problem is putting pressure on the market and "what you see is competition forcing yields down," said IATA director general Tony Tyler, former CEO of Hong Kong's Cathay Pacific Airways. Mr. Tyler made the remark following his Sept. downgrade of air cargo traffic of six percentage points from 1.5% to 0.9% for 2013. Passenger growth is set to 5% growth for the year. Those with growth increases in August were Middle Eastern carriers up 23.8%, which put pressure on Asia-Pacific freight carriers by slowing demand for manufactured goods in the region. IATA is forecasting cargo growth into 2014 at a healthy 3.7%. 
Read More About IATA

   ***FedEx To Buy Itself ...... as the board of directors has given the go-ahead for a new share repurchase program of up to 32 million of its voting common stock. The company said the new repurchase authorization of the remaining 7.4 million shares is under its existing buyback program. It stated the shares may be repurchased from time to time in the open market or in privately negotiated transactions, according to UK's Transport Intelligence. During the 1st quarter of fiscal 2014, the company repurchased 2.8 million shares of its common stock and as of Sept. 30, the company had 317 million common shares outstanding.

   ***Air France Steps Back...... as the cargo division will close its Paris Orly freight center next year laying off 100 cargo workers and another 200 elsewhere in a drive to profitability after a 25% operating losses in the first half. Revenue ton kilometers (RTK) fell 5.5% in the first nine months against capacity decline of 3.2% and Americas traffic was down 1.9% while Asia-Pacific volume declined 9.8%. Air France will phase out its B747-400 freighters by 2015 and focus on its two maindeck B777 freighters. 

    ***Act 2...... as Germany's ACG Air Cargo Global is a new cargo start-up planning to succeed failed German cargo carrier Air Cargo Germany with operations scheduled to start as early as January, Swiss-based ch-aviation reports. It is reportedly planning to use Frankfurt Hahn as its operating base, but use a foreign air operator certificate. Air Cargo Germany is continuing with its liquidation process, said the report.

   ***FedEx New Temp Control Unit At The Hub .......as the 88,000-square-foot (8,175-square-meter) facility will interface with Memphis hub operations. The new facility, which is scheduled to be complete and in operation by the fall of 2014, offers temperature-controlled rooms for frozen, cold and controlled room temperature products. There are also flexible walls that allow precise temperature control and segregation of commodities and real-time CO2, humidity and temperature monitoring.

   ***Less 747-8, Prep For The X ...... as Boeing is cutting the production of its newest 747, the 747-8 jumbo in January 16% to 18 planes a year due to slack demand, reports in the Seattle Times. "Although we are making a small adjustment to our production rate, it doesn't change our confidence in the 747-8 or our commitment to the programme," said 747 VP Eric Lindbladas. Boeing has sold 40 passenger and 67 cargo versions; 56 jets have been delivered. A Washington state study said 6,400 Boeing employees work on the 747 program in Everett with another 3,000 supporting it. Prospects for further sales of this version may recede after Boeing launches the 407-seat 777X, expected next month at the Dubai Air Show. The twin-engine 777X will be more fuel efficient and capable of carrying almost as many passengers. Although the 747-8 is bigger, airlines don't fill it to its 467-seat capacity, leaving the fate of the 747-8 on the more salesworthy freighter version. 
Read More About The Boeing 747-8
Read More About the Boeing 777X

   ***Open 24 Hours, But No Drive-Thru .... as Guangzhou's Baiyun Int'l Airport's cargo business development has been approved by the government, and customs will soon start providing 24/7 clearance, Xinhua reports. According to the plan, the airport customs will also improve its services to bring greater convenience to shippers and forwarders and cooperate with relevant departments to enhance clearance efficiency. To further optimise customs declaration and inspection, trusted shippers can apply for processing prior to the arrival of cargo. 

   ***Freighter Conversions Abroad ....... as Boeing Shanghai Aviation Services Co., Ltd., (Boeing Shanghai) has successfully completed the first of three 737-400 passenger-to-freighter (PTF) conversions for Yangtze River Express under a Supplemental Type Certificate (STC) held by Aeronautical Engineers, Inc. (AEI) under license from Boeing. This PTF conversion is also the first 737 PTF Boeing Shanghai has conducted for a Chinese operator. By the end of 2013, Boeing Shanghai will have redelivered three 737 Classic PTF conversions. 
Read More About Boeing Shanghai

   ***American Cargo On The Black Sea .....as the U.S. and Romania have agreed to allow American troops and cargo to use the air base of Mihail Kogalniceanu as a transport hub as they move in and out of Afghanistan. U.S. Defense Secretary Chuck Hagel finalized the agreement in a meeting with Romania's Defense Minister Mircea Dusa. The Romania base is critical because beginning next June the U.S. will no longer be able to use the Manas Transit Centre in Kyrgyzstan. That complicated matters for the U.S. as it brings thousands of troops out of Afghanistan over the next year, according to Associated Press. Romania has also agreed to host an Aegis radar as part of the broader European missile defense system meant to protect against possible Iranian missile attacks.

    ***Heathrow Cargo Handlers Busted ......as the drugs would arrive in London in cargo containers on flights from Mexico City, police added in a satement. Once the aircraft arrived into the terminal, cargo handlers would quickly remove the drugs, which were boxed inside the container, before it was moved on. Couriers would then liaise with the cargo handlers, collect the drugs and pass them on to accomplices responsible for distributing the drugs to local dealers. During the period of the investigation, large quantities of near pure cocaine were recovered with a street value totaling many millions of pounds, the Oct. 17 statement said. "We have dismantled what was a sophisticated, well oiled, well established operation involving a network of criminals from the cargo handlers to the couriers to the distributors all the way up to the top of the pile," said Detective Superintendent Stephen Ratcliffe from the Serious, Organized and Economic Crime Command. Those held in the raids in London and the southest were aged between 25 and 53 and remain in custody. 

>>> American Airlines has posted a 7.5% year-on-year increase to 146,690 million ton miles in Sept., and for the first nine months of 2013, ton miles dropped to 1.330 million, slipping 0.4% from the 1.325 million reported for the same period last year. >>> Etihad Cargo increased its cargo volumes by 41% to 132,448 tons during the 3rd quarter up from same quarter 2012 of 94,123. >>> Cathay Pacific Airways and Dragonair posted a 4.4% year-on-year decline in Sept. air cargo volume 128,610 tons while passenger numbers rose 6% to 2,379,812.>>> Lufthansa Cargo tonnage fell 2.2% to 1.3 million tons it increased its load factor to 69.3% in the first 9 months of the year. >>> Shanghai's Changi Airport processed 152,800 tons of air freight in Sept., a decrease of 2.5% year-on-year, but was slightly more than the previous month's 151,000 tons. >>> Turkey saw air cargo increase 11.8% in Sept. to 266,000 tons year on year, rising to 1.9 million tons year to date, reports Ankara-based Anadolu Agency. 

    ***Keep Your Nose Up !...... as Southwest Airlines Co. (LUV) has fired the captain who was at the controls of a plane that landed nose first at New York's LaGuardia Airport in July, injuring nine people and snarling air traffic for hours. Cockpit procedure has been a focus of the U.S. inquiry into the July 22 incident. Flight 345's captain, a 13-year Southwest pilot, took control from the first officer just before the Boeing Co. (BA) 737 hit the runway, according to the National Transportation Safety Board, whose investigation continues. "The question is why the captain took control," Bill Waldock, who teaches accident investigation at Embry-Riddle Aeronautical University in Prescott, Arizona, said in an interview. "Normally, unless something major is wrong, the flying pilot is going to maintain control. The flying pilot can feel what the airplane is doing. When the captain takes control, it takes him a few seconds to understand what's happening." With its nose pointed three degrees downward, the 737-700 struck the runway first with the landing gear at the front of the plane instead of settling onto the main wheels located beneath the wings, the NTSB said in a July 25 release. 

    ***Really ????? .....as the Pentagon is sending US$50M cargo aircraft straight from the assembly line to mothballs because it has no use for them, yet it still hasn't stopped ordering the aircraft, according to a report. A dozen nearly new Italian-built C-27J Spartans have been shipped to an Air Force facility in Arizona dubbed "the boneyard," and 5 more currently under construction are likely headed for the same fate, according to an investigation by the Dayton Daily News. The Air Force has spent US$567M on 21 of the planes since 2007, according to purchasing officials at Dayton's Wright-Patterson Air Force Base. Of those, 16 have been delivered – with almost all sent directly to Davis-Monthan Air Force Base in Tucson, where some 4,400 aircraft and 13 aerospace vehicles, with a total value of more than US$35Bn, sit unused.
Read More About The C-27J Spartan Cargo Controversy

   ***When The Cargo Is Jewels ...... as a French mountain climber stumbled upon a case of dozens of cut jewels, worth hundreds of thousands of dollars - believed to be debris from one of two Air India crashes decades ago, police said. Police commander Sylvain Merly of France's Savoie region said the experienced Mont Blanc climber, who asked to stay anonymous, found the box marked "Made in India" while scaling one of the peak's glaciers and turned it in on Sept. 9. Authorities hope to find someone connected with its owner, who is presumed to have been a passenger on one of the two jets that crashed in 1950 or 1966. Merly said Sept. 26 the metal box, slightly smaller than a shoe box, was filled with small bags of loose jewels, mostly emeralds and sapphires. Merly said debris from the Air India crashes regularly rises to the surface on Mont Blanc. "Things come up from the glaciers," Merly said. "They're always moving."  

   ***When The Low Bid Crumbles ...... as the US$250M runway beneath our 
Countryman & McDaniel office windows at Los Angeles International Airport, rebuilt 6 years ago, is riddled with construction defects, including cracks, exposed steel reinforcing bars and deteriorating concrete, according to city officials. The mounting problems, including the runway's failure to meet FAA construction standards, could disrupt future flight operations at the nation's third-busiest airport, according to a city lawsuit filed against companies responsible for the work. The city says it will be forced to prematurely reconstruct the 2 1/2 miles of pavement, a potentially complex and disruptive undertaking that would require rerouting air traffic to other runways. Typically, a commercial runway has a life span of 20 to 25 years. Located on the south side of the airport complex near the city of El Segundo, the runway 25-Left continues to be used for over 500 takeoffs and landings. LAX officials said it poses no immediate danger.
See Runway 25-Left On Our Live Webcam

OUR "C" Section:  FF World Ocean News***
FF World Ocean Briefs ____________                                                   

   Preparing For The Mammoth P3 Alliance ...... as announced this month, Maersk Line, MSC and CMA CGM intend to share vessels in the Asia-Europe, Transpacific and Transatlantic trades from 2Q 14. A total of 255 ships will be operated in 29 loops with a combined capacity of 2.6 million teu. Drewry reports the ramifications of the consolidation for the port industry are enormous. Each of the three carriers already operates more ULCVs than anyone else, so catering for their combined cargo handling requirements will be on a scale never seen before. Not surprisingly, views are divergent on whether the three will consolidate/rationalize their port calls, therefore. Whilst economies of scale are there for the taking, it will result in tampering with the well-established berthing windows of each schedule, and the feeder/intermodal connections of each carrier, which will, presumably, remain separate.
Read The Entire Drewry Report

   ***The Unseen Risk ...... as cyber attacks on containerships and port infrastructure will become more sophisticated, says IT security consultancy MWR InfoSecurity, which advises companies to do more about supply chain security. Maritime and IT security companies have raised their concerns after hackers penetrated software in the Port Antwerp to pinpoint the location of containers concealing smuggled drugs so they could be delivered to bogus drivers with the right documents and codes. Said GoAGT (Gulf of Aden Group Transits) CEO Nick Davis: "Supply chain security in the future will be critical especially in the U.S. and mainland Europe, the sheer volume of mega ships that can carry more than 14,000 TEU presents the biggest security challenge for any port authority and customs network." The moving parts of the supply chain coupled with just in time delivery means security is a necessary evil and one that is hugely misunderstood, Mr Davis added. "Fusing data and more importantly sharing data with agencies that can stem, illegal contraband, drugs, weapons and the like is a distant goal far from being achieved." Davis continued, 'This attack played out somewhat like an Advanced Persistent Threat (APT)." They were apparently active for around two years, and were able to make use of advanced techniques with seemingly professional execution. However, this is what anyone can now buy on the black market as a service, so far from just being available to a nation state, anyone with money can purchase these services.
Read More About GoAGT Security Solutions

    ***The Changed Shape of Shipping ...... as high-cube containers have grown eight per cent in 2012 and now account for 49% of the boxes afloat, a figure that is expected to surpass the 50% by the end of the year, say Drewry analysts. The high-cube growth is reducing the proportion of FEUs, though TEUs have held their 33% allotment for many years. High cube boxes also pose shipboard stowage problems and skew cargo data when extrapolated from TEU units, which hold 6.5% less cargo than the high cube equivalent. Drewry said there is now a need to measure cargo by tons or cubic meters because of differences between the FEU and the high cube 40-footer, which allows shippers 13% more cargo and little extra cost on land or sea. Reefer shippers are the biggest group to demand the 40ft high-cube used in almost 92% of all refrigerated cargo being shipped in equipment last year at two million TEU. But dry cargo remains mostly shipped in the high-cube. The 9ft 6in high cube containers are usually stowed below deck to prevent compromise of the navigating bridge's line of sight on the deck where 50% of the vessel's cellular capacity is located. However in doing so as much as 7ft (2.1 metres) are lost under-deck because it is built for eight-feet, six -inch boxes, which means the space usually the top tier of stacks are lost. The bottom line is containerized cargo growth has been underestimated as a 40ft high-cube container equates to two TEU when in fact, it is 13 per cent more than two TEU.

   ***Shipping Act Violations Charged ..... as the Federal Maritime Commission (FMC) has recovered US$617,500 in fines from 9 non-vessel-operating common carriers (NVOCCs) and forwarders in the U.S. and abroad. Fines resulted from FMC investigations in the Seattle, South Florida, Los Angeles, New York and Washington DC. Bureau of Enforcement lawyers induced the accused to settle without admitting to Shipping Act violations. Fines were paid by East-West Logistics Inc, Versatile Int'l Corp, Whale Logistics (Shanghai) Co Ltd, Koil Inc. dba VShip Co, China Int'l Freight Co Ltd, UTi, United States Inc, Top Shipping Logistics Co Ltd, City Ocean Logistics Co Ltd and City Ocean International Inc.
The Ocean Shipping Reform Act of 1998

    Maersk Line To Halt Iran port calls ........ as the move a 'pragmatic decision based on an assessment of balancing the benefits of doing limited business in Iran against the risk of damaging business opportunities elsewhere particularly the U.S. 

   ***Slow Steaming In The Nursery .... as vessels entering U.S. ports will have to slow to 10 knots to accommodate whale migration calving season in Mid-Atlantic Seasonal Management Areas from New York to Savannah between Nov. 1 and May 1. The Southeast U.S. Seasonal Management Area that includes the ports of Brunswick, Fernandina and Jacksonville, will become effective on Nov. 15 and run to April 15, reports GAC Hot Port News. In addition to the speed restrictions, vessels of 300 gross tonnage or more, operating into the ports of Brunswick, Fernandina and Jacksonville must also comply with the Mandatory Ship Reporting System rules Nov. 15 and will remain effective until April 15. As of Nov. 15 and running until April 15, mariners are strongly encouraged to use recommended two-way routes to reduce the likelihood of vessel strikes in those areas where routes have been established in the Southeast Seasonal Management Area off Brunswick, Fernandina and Jacksonville.
Rules For Compliance with Seasonal Management Areas
Maps of the Calving and Nursery Grounds 

   ***Going To The Gold ........ as ESCO Integrated Transport North America has launched a regular container service from North America to Novorossiysk and Sochi in support of the 2014 Winter Olympic games in Sochi. The direct feeder service to Sochi from Istanbul is offered every nine days from the ports of New York, Norfolk and Savannah with transshipment at Istanbul. Transit time is between 25 and 30 days from the U.S.

   ***So Cal Ports Surge ....... as the Port of Long Beach posted a 14.7% year-on-year increase in Sept. container volume to 587,100 TEU, giving it year-to-date rise to five million TEU, up 13.7%. Meanwhile the adjacent San Pedro Bay Port of Los Angeles suffered a 4.6% year-on-year decline in Sept. container volumes to 711,000 TEU, giving it a year-to-date decline of 5.5% to 5.8 million TEU. September imports increased 16.2% to 307,981 TEU while exports rose 17.2% to 134,676 TEU as empties increased 9.4% to 144,457 TEU, reported American Shipper. Long Beach said Sept. ran second to August as the busiest month of the year, as LB volumes continued to creep up on Los Angeles for the title of top US container port with its eight million TEU in 2012.

   ***All Quiet ..... as the 2013 Atlantic hurricane season looks set to go down as a big washout, marking the first time in 45 years that the strongest storm to form was just a minor Category 1 hurricane. There could still be a late surprise in the June 1-Nov. 30 season, since the cyclone that mushroomed into Superstorm Sandy was just revving up at this time last year. But so far, at least, it has been one of the weakest seasons since modern record-keeping began about half a century ago, U.S. weather experts say. Apart from Tropical Storm Andrea, which soaked Florida after moving ashore in the Panhandle in June, none of this year's cyclones has made a U.S. landfall.

>>> Eastern China's port of Ningbo posted a 7.8% year-on-year increase in container throughput in the 3rd quarter to 4.49 million TEU. >>> OOCL lifted 1,349,205 TEU in the 3rd quarter, 0.9% less volume than in the same period last year.

    ***This Month In U.S. Navy History 
1864 - 
USS Washusett captures Confederate raider CSS Florida in harbor of Bahia, Brazil.
1917 - 
USS Cassin (DD 43) is torpedoed by German submarine U-61 off the coast of Ireland. In trying to save the ship, Gunner's Mate Osmond Kelly Ingram becomes first American Sailor killed in World War I and later is awarded the Medal of Honor for his heroism. He becomes the first enlisted man to have a ship named for him, in 1919.
1918 - Naval aviators of 
Marine Day Squadron 9 make the first raid-in-force for the Northern Bombing Group in World War I, when they bombed a German railroad at Thielt Rivy, Belgium.
1924 - Rigid airship 
Shenandoah commences transcontinental flight.
1944 - The Battle of Leyte Gulf, a series of separate battles, begins with attacks on Japanese ships.
1962 - A U.S. reconnaissance plane photographs a Soviet nuclear missile site under construction at San Cristobal, 100 miles west of Havana.
1983 - Terrorist bombing of Marine barracks at Beirut airport in Lebanon kills 241 members of the 24th Marine Amphibious Unit.
1990 - 
USS Iowa (BB-61) decommissioned at Naval Station Norfolk, VA. She would be back.

    ***Solemn Treasure .....  as a violin that was being played as the 
RMS Titanic went down was sold for US$1.46M at auction on Oct. 19, a record price for memorabilia from the doomed ocean liner. Band leader Wallace Hartley played the instrument, trying to calm passengers as the ship slipped into the frozen waters of the North Atlantic in April 1912 after colliding with an iceberg during its maiden voyage from Southampton to New York. Hartley's band played the hymn "Nearer, My God, To Thee" as passengers climbed into lifeboats. Hartley and his seven fellow band members all died after choosing to play on. More than 1,500 people died. When Hartley's body was recovered more than 10 days after the disaster, the violin was found in a leather case strapped to him, according to the folklore that has grown up around the event.

    ***Monterey Bay National Marine Sanctuary Study On Effects of Shipping Containers Lost At Sea. ...... a fascinating sudy.

   ***Capt. Phillips Crew Lawsuit Has No Merit Says Maritime Expert ....... as noted Admiralty Attorney and Author, Dr. Capt. John A.C. Cartner was interviewed by Maritime TV in response to recent press accounts of a lawsuit claim filed by several former crew members of the Maersk Alabama related to the hijacking of the ship by pirates in 2009, documented in the current hit movie Capt. Phillips starring Tom Hanks. In the interview.
Watch The Maritime TV Interview

    ***National Press Club Newsmaker Event - Capt. Richard Phillips Remarks ....... as the master who survived a harrowing ordeal at sea in 2009 when his ship the Maersk Alabama was boarded by Somali pirates and whose story is the subject of a new feature film, Captain Phillips, starring Tom Hanks being released Oct. 11, spoke at a National Press Club Newsmaker the day before the film's opening.
Watch Capt. Richard Phillips Remarks
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:  Please view the dramatic new pictures at our special "Gallery of Cargo Loss" website feature. 

See our new feature for Nov. 2008: "The Death of Hercules"

See our newest photo feature "Singles Only" - Transportation Disasters Told In A Single Photo!

Daily Vessel Casualties ...... as we don't want you to miss the excitement of our 24 hour reports of the dramatic events at sea each day -- stories of casualties & pirates --- almost none of which are carried on your local news.  Edited daily by Christoph Wahner, Esq. of Countryman & McDaniel. 

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***
The Cargo Letter "Cyber Ports Of Call"                      
Here are our suggested world wide web sites of the week for your business, your information and your amusement..............

Cargo & Trade>>>>>>

2013 Top 50 Global & Top 30 Domestic 3PLs

Airbus' Cargo GLOBAL MARKET FORECAST 2013-2032

Amazon the Remora (Suckerfish) of the Retail World, Operates within Supplier Warehouses

EU Trade Deal With Costa Rica & El Salvador Becomes Operational

FedEx Displays Its First 767-300F Freighter

Maersk Film: Container Controled Atmosphere For Reefers .....how it works

Study Says Tomato Shipments Cost Less in Corrugated

U.S. Dept. of Commerce Final Rules on Export Control Reform

U. S. Customs Schedule B PDF .......free

U.S. Trade Representative Request for Public Comments to Compile the Report on Technical Barriers to Trade  


Shaking the Skies......by Giovanni Bisignani, Former DG | CEO of IATA -- the untold story of change in aviation after 9/11 


Transport Events


Trade Shows, Exhibitions, Conferences & Business Events Worldwide

World Trade Organization Events

6th Optimising Port Development Conference .......... 4-5 Dec. 2013, London

9th IATA Cargo Claims & Loss Prevention ......... 19 - 21 Nov., 2013, Limerick, Ireland

11th Annual European 3PL Summit & Chief Supply Chain Officer Forum ..........12-14 Nov., Amsterdam

Asia Pacific Rail 2014 .....18-20 March 2014, Hong Kong

Battleship USS Iowa Veteran's Day ............ 9 Nov. 2013, Port of Los Angeles

Cargo Logistics Canada Expo + Conference .......... 29-30 Jan. 2014, Vanouver, Canada

European International Freight Conference 2013 ........ 21-23 Nov. 2013, London

FNC Freight Conference 2013 ........21-23 Nov. 2013, London

IATA Legal Symposium 2014....... 23 - 25, Feb. 2014, San Francisco

IATA Passenger Terminal Expo 2014 .........25-27 March 2014, Barcelona

Intermodal Asia 2014 ........1-3 April 2014, Shanghai World Expo Center, Shanghai

SNAME 2013 Annual Meeting & Expo ........ Nov. 6-8, 2013, Hyatt Regency Bellevue - Bellevue, WA

Transport Security Expo 2013 ........13-14 Nov. 2013, Olympia, London UK

World Cargo Symposium 2014 ........11-13 March, Hyatt Regency Century Plaza, Los Angeles

Apps For That - iPhones & Droids>>>>>>>>>

Magnifing Glass

Meteor Counter..........Be a part of NASA meteor research

PaperKarma ......intellegent spam control

Secret Menu Starbucks Edition ....over 100 delicious beverage recipes to try on your next visit

Shoeboxed Receipt & Mileage Tracker .....maximize reimbursements and tax deductions in seconds

General Interest>>>>>>>>>

Air New Zealand's Latest Safety Video Stars Betty White

Amazing Self Parkimg Car

"Big Ass Spiders." ..... Greg Grunberg (the nieghbor of your editor) has made a new movie.
Watch The Trailer:

Cruise Ship Parade

Disneyland - The Birth of the Swamp Fox

Inside A U.S. C-130H During A Night Air Cargo Drop Over Afghanistan

"Billy Bad Ass" - The DDG 1000 Zumwalt Class - U.S. Multimission Stealth Destroyer

Clever German Slingshot

Human Acievement & Spirit

"Oilfield Dodge" Promotional Film

Russian Car Commercial On Ice - Amazing

Supersonic—The Origins of Concorde

Why A Man Should Always Let The Lady Speak First

Winglets Save Billions of Dollars in Fuel Costs

World's Most Dramatic Runways

World War II in Europe: Every Day ......the changing front lines of the European Theater of World War II every day from the German invasion of Poland to the surrender of Germany.

Would You Be Told If Your Plane Was Going Down?

OUR "E" Section:  The Forwarder/Broker World***
  7. New U.S. Transport Related Legal Cases _______   

    ***MAP-21 Enforcement Grace Period Announced.......as the Federal Motor Carrier Safety Administration has provided a 60-day phase-in period beginning 1 October 2013 for the new operating authority and minimum financial responsibility requirements to allow the industry to complete all necessary filings.  Under § 32915 of the "Moving Ahead for Progress in the 21st Century Act" (MAP-21), anyone acting as a broker or freight forwarder and subject to FMCSA jurisdiction, including motor carriers, must register and obtain broker or freight forwarder authority from the FMCSA.  Under § 32918, financial security requirements are amended and increased so that all FMCSA regulated brokers and freight forwarders must obtain and file with the FMCSA a surety bond or trust fund agreement in the amount of US$75,000. 

MAP-21 is intended to establish a clear definition of the three types of operating authorities for domestic interstate logistics companies: freight forwarder, broker, and carrier.  As will now be enforced, a freight forwarder is one who assumes carriage liability under a bill of lading but subcontracts the load to a carrier and does not physically perform carriage or operate equipment.  A broker is one who does not assume liability for carriage, does not issue a bill of lading and merely appoints an identified carrier on its customer's behalf as agent.  A carrier assumes carriage liability under a bill of lading and performs physical carriage / operates equipment.  Under the new changes, there will ultimately be separate operating authority numbers for each authority type and the provider is to make clear under which authority it is acting.  Without additional broker or freight forwarder authority, motor carriers will no longer be permitted to fully subcontract or "convenience interline" a load. 

Proper compliance by your operation will not only avoid regulatory penalties but will facilitate a more accurate risk forecast as to legal liabilities.  We encourage you to contact the attorneys at 
Countryman & McDaniel for a consultation <info@CargoLaw.com >                        
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)
Christoph M. Wahner, Esq. (Countryman & McDaniel) 
Daily Vessel Casualties
Bruce Lindsay, Esq. (Countryman & McDaniel)
Maria Jackson (Countryman & McDaniel)

The Cargo Letter_
since 1978)

    A world news service for Air/Ocean Freight Forwarders, NVOCC's, Consolidators, Indirect Air Carriers, Surveyors, Intermodal Shipper's Agents, Inland Carriers, Customs Brokers and Liability& Marine Underwriters world-wide .............a free service to more than 8,000 industry subscribers & readers on 6 continents.
          Michael S. 
McDaniel, Editor.

Subscriptions........only by accepted application to:

The Cargo Letter CargoNews@aol.com
                        To Our Firm: 
Mail Address:    
The Cargo Letter
                         % Countryman & McDaniel
                        11th Floor LAX Airport Center  
                        5933 West Century Boulevard
                        Los Angeles, CA 90045 USA

Telephone:        (310) 342-6500
Telefax :          (310) 342-6505
Cable :             McLawman LSA
News Fax:         (818) 224-3058 [24 Hours and Weekends]

The Cargo Letter_ is published by The Law Offices of Countryman & McDaniel:  Legal, Business, Marine Insurance and Claims representation of Air/Ocean Freight Forwarders, NVOCC's, Indirect Air Carriers, Shipper's Agents, Inland Carriers and Customs Brokers......and Liability & Marine insurance Underwriters since 1978 in the United States & world-wide via The Cargo Law Network.  Member, Maritime Law Association of the United States, FIATA and others.

          Our Home Page Of Forwarder/Broker Services
    Cargo Law

The Cargo Letter Home Page _

The Cargo Letter>>>>