Law Offices of Countryman & McDaniel
Air & Ocean Logistics - Customs Broker News
30 May 2014

Good Friday 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 May 2014 and as we celebrated National Maritime Day & World Trade Week.

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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
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       Michael S. 
McDaniel, Editor, Countryman & McDaniel, forwarder/broker, hull & machinery attorneys at LAX.

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

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

   ***Are Your A Safe Trader? .......as on
May 16th 2014, the European Union and China signed a historic agreement recognising each other's certified safe traders. According to EU sources, this agreement will make customs proceedings much easier, cheaper and faster for trusted operators. The same sources reveal that Customs authorities are now able to focus their resources on real risks, thus making the supply chain safer and more efficient on both sides. In addition to this agreement, the EU and China signed two additional agreements. The first is a Strategic Framework for Customs Cooperation. The second being an action plan on Intellectual Property Rights.
Learn More About The New Agreement

    ***Sino-Putin Dependency Is Created ...... as
China and Russia have reached a landmark US$400Bn gas supply deal that would span over the next three decades. The landmark agreement was confirmed on 21 May, toward the end of Russian President Vladimir Putin's trip to China. Earlier during Putin's visit, it had appeared the negotiations between the China National Petroleum Corporation and Russian state-owned energy giant Gazprom were not going to yield a deal in time, and would instead be pushed down the road. However, the two sides ultimately confirmed on 21 May they had reached an accord, suggesting past disagreements over the pricing of Russian-sourced gas had reached some type of resolution. The timing of the gas deal – as Russia remains under heavy diplomatic fire from many of its Western partners over its handling of the Ukraine crisis – has prompted analysts to question whether this initiative is part of a broader Russian effort toward deepening its Asian alliances and creating Asian dependencies which are perhaps stronger than Western ties.

    ***Overcoming Discriminatory Trade Tariffs ...... as the
United States has won a trade dispute with China over duties slapped on U.S. exports of large cars and sport utility vehicles, the World Trade Organization said on 23 May.. China, the 2nd-biggest market for U.S. auto exports, in 2011 started levying punitive duties on vehicles with engines of 2.5 liters and above, in retaliation for U.S. trade policies. The duties have since expired. China, which only joined the WTO in 2001, is the second most common target of U.S. disputes at the trade body after the European Union. U.S. Trade Representative Michael Froman said the duties affected US$5.1Bn in U.S. auto exports in 2013, including popular models such as the Jeep Grand Cherokee, Buick Enclave & Cadillac Escalade. Total U.S. auto exports to China totaled US$8.6Bn. Although Froman said he was pleased China had dropped the duties, which ranged up to 21.5%, he was worrying the United States had brought, and won, three WTO cases against China over unfair import duties.
Read The WTO Analysis

    ***Sugar Rush ....... as the U.S. Dept. of Commerce has been given a green light to proceed with its investigations of Mexican sugar being allegedly dumped on the U.S. market, along with claims that the latter's producers are benefiting from unfair subsidies. The investigations come in response to petitions filed earlier this year by the American Sugar Alliance, a U.S.-based coalition of sugarcane and sugar beet producers. The group complained that Mexican sugar producers are benefitting from allegedly unfair subsidies, and  the product is being sold below its normal value on the
U.S. market – a practice known in trade jargon as dumping. The industry group contends the alleged dumping and unfair subsidisation of Mexican sugar could cost US sugar producers upwards of US$1Bn this year and will cost American taxpayers US$278M to keep the industry afloat.

   ***Rebar Dump Duty Set ...... as the U.S. Commerce Dept. has set preliminary duties on imports of steel rebar from
Mexico and Turkey after U.S. producers filed a complaint about alleged dumping. The department set dumping duties of up to 66.7% on imports from Mexico and duties of up to 2.6% on Turkish imports. This comes as American producers said companies from the two countries were selling steel rebar at unfairly low prices. A final decision is due on July 2, reported Reuters.

    ***Finally A Unamimous Agreement On Something ......as for the first time in their 18-year history, the World Trade Organization member countries agreed on a multilateral pact. They agreed all members should modernize and develop a more professional process for inbound products. The WTO's new pact encourages all member countries to modernize–to eliminate red tape and the corruption that seems to accompany it. By creating a more transparent environment for international trade, the WTO's action should make it easier for companies to expand into developing nations. Modernizing has other added benefits, as well. By improving processes, General Pascal Lamy has estimated that developed countries can reduce costs by 10% on inbound processes; developing nations are expected to save 50%. All of this is good news for global trade.
World Trade Organization
World Corruption Perception Index 3013 By Nation

    ***Anti-Chinese Riots Disrupt Vietnam Trade ...... as Hong Kong's Yue Yuen Industrial Holdings, maker of Nike and Adidas shoes, has suspended production in Vietnam in the wake of anti-Chinese riots protesting oil drilling in South China Sea waters claimed by Hanoi. Some 20,000 were said to be on the rampage, looting, torching factories and storming industrial parks, in protest over oil drilling as Chinese warships and Vietnamese coast guard cutters scrimmaged with water cannon and ramming at sea.

    ***Taiwan Soars, But Carefully Points Out It Is Not China .......as exports, including those of Taiwanese factories overseas, were up 8.9% in April - their fastest growth since January 2013 - driven by strong demand for mobile devices, and beating earlier forecasts of 5%. The outlook for the next quarter is semiconductor and electronics suppliers expect to reap benefits from new releases of smartphones and tablets, while subdued demand from
China will likely curb orders for capital goods, reports Reuters. The impact of the riots in Vietnam targeting Chinese-owned factories, with many Taiwanese companies mistaken for mainland concerns, is also expected to be slight, says the Economic Affairs Ministry because firms are sourcing elsewhere.

   ***Bringing Your Goods Back Home ...... as the
Kingdom of Bahrain becomes the 84th country/territory to join the ATA Carnet system effective June 1st 2014. Bahrain joins four other Middle Eastern countries that are members: Lebanon, Iran, Israel, and the United Arab Emirates. Armenia, Turkey, and Cyprus are also members from that region. In addition, Saudi Arabia is in the process of joining the ATA Carnet system.
What Is A Carnet?
Learn More About The Carnet ATA System


    ***BIG CHANGE: Pricing Motor Freight Like Air Cargo .....as
UPS may find FedEx's new pricing rules too tempting to pass up. This is because FedEx is preparing to start charging for ground-shipped packages by size, not just weight begining 1 Jan. 2015. The promise of US$350M in extra revenue could be "compelling" enough to spur UPS to copy that approach, said Kevin Sterling, a BB&T Capital Markets analyst. UPS said it's "continually" evaluating its policies. "History tells you that when one changes prices, the other follows," Sterling said yesterday in an interview about the prospects for Atlanta-based UPS joining FedEx with a different rate structure. FedEx said May 2 it's moving to "dimensional-weight" pricing in 2015 at its Ground business, matching the policy at its Express unit. Shipments of e-commerce purchases will be among those affected as size becomes part of the rate calculations, buoying FedEx as shoppers go online to order everything from shoes to household supplies. Traditionally, all airfreight moves on the basis of dimentional-weight such that a carton of feathers moves at the same price as a carton of bowling balls. On the other hand, some experts stress the shift in pricing all FedEx Ground packages by size amounts to a rate increase and is likely to push some customers to switch from Ground to competitors like UPS or the U.S. Postal Service.

   ***What The Heck Is A 4PL? ..... as the concept of a fourth-party logistics (4PL) provider was first defined by Andersen Consulting (now Accenture) as an integrator that assembles the resources, planning capabilities, and technology of its own organization and other organizations to design, build, and run comprehensive supply chain solutions. Whereas a third-party logistics (3PL) service provider targets a single function, a 4PL targets management of the entire process. Some have described a 4PL as a general contractor that manages other 3PLs, truckers, forwarders, custom house agents, and others, essentially taking responsibility of a complete process for the customer.

   ***DHL Sees The Future ...... as online retail dominance in the next decade will be measured by the success of logistics in providing competitive advantages, such as deliveries within a few hours on the day of ordering, flexible receiving and return times, according to Deutsche Post DHL latest "Global E-Tailing 2025" study. The study, supported by trend research institutions looks at cross-border online commerce and its implications for the logistics industry through four scenarios. The different future projections are based on a detailed analysis of the most influential factors - from energy and raw material prices to technological, political and social factors to retail and consumption patterns. The scenarios also outline possible effects of changes to society's value system by 2025. The research examined selected developed and emerging markets around the world. Trend scouts also studied purchasing and logistics trends in 12 international metropolises - among them
New York, Moscow, Bangalore, Jakarta and Lagos. E-commerce makes up 8% of the overall trading volume in Europe already but deepending on scenario, this share could rise up to 40% in developed countries and up to 30% in emerging markets. 
Read The New Report: "Global E-Tailing 2025"

    ***Silk Road On Iron Rail ....... as Chengdu-Europe freight railway service running from Chengdu to Poland has launched 45 runs since it commenced operation in April 27 last year, carrying a total of 3,704 TEU, weighing 82.92 million tons, reports Xinhua. This means the Chengdu-Europe Railway has become one of the major transport route for Sino-European trade from central and western
China to Europe and help the region shake off the dependence on sea ports. The direct linkage and lower cost have attracted cargo from China's 10 special surveillance zones, such as Chengdu, Shanghai Pudong International Airport, Suzhou Industrial Park, Wuxi High-tech Comprehensive Bonded Zone, Shanghai Qingpu and Jiangsu Wujiang Export Processing Zone, which contributed 51% of the total cargo volume to the service. Cargo from areas under special customs supervision are mostly high value added goods, such as laptops, PDA and hard disk drives. A single journey of the service lasts 14 days to Europe, with the on-time delivery performance reaching 99%.

    ***Positive Development ...... as an agreement has been reached between the seven Class 1 freight railroads and the Federal Communications Commission (FCC) regarding the installation of positive train control (PTC) antennas, but the Association of American Railroads (AAR) says the delay in developing the process has severely impeded PTC implementation and a fully operable system by the 2015 deadline is not possible. The agreement between the FCC and the Class 1s addresses the railroads' construction of the nearly 11,000 PTC poles before May 2013 that may not have undergone the statutorily required environmental and historic preservation review and allows the railroads to immediately start using those poles for important testing and other preparatory activities and for the ultimate provision of PTC. American Indian tribes will get US$10M to mitigate cultural losses from a US$13Bn federally mandated rail crash avoidance scheme involving the erection of the radio towers that might infringe on sacred tribal lands.
Read More About Positive Train Control

   ***Map-21 Legal Actions Seen  ....... as since the new law took effect in late 2013, both private and agency lawsuits have commenced against alleged violators. Companies engaging in even one instance of brokering freight to another motor carrier, by definition, you are a freight broker. This means you need to be properly licensed with Freight Broker authority and procure the US$75,000 bond or risk fines and penalties (up to US$10,000 per offense). Over and above the FMCSA requirements, we have seen several large, national shippers, who utilize the services of motor carriers like you, require the motor carriers to meet the new broker requirements if the motor carrier might be involved in brokering. Consult the 
Countryman & McDaniel lawyers for further information.

    ***When In Doubt, Fine The Boss 
...... as the Federal Motor Carrier Safety Administration (FMCSA) wants to fine transport executives US$11,000 each time they induce drivers to disobey new hours of work rules and other regulations. The fines would apply to shippers, intermediaries, receivers or motor carriers who threaten drivers with unemployment if provisions laid out in the Federal Motor Carriers Safety Regulations (FMCSR) or the Hazardous Materials Regulations aren't disobeyed, American Shipper reports. In its posting in the Federal Register, the FMCSA wrote that the rule would provide a way for drivers to report coercion, detail how the agency would investigate such claims, and list penalties against guilty parties.

   ***Steady Inland Increase ....... as truck tonnage saw gains for the third straight month in April, according to data issued by the American Trucking Associations (ATA). Seasonally-adjusted (SA) truck tonnage in April was up 1.5%, following a 0.6% gain in March, with the index at 129.1 (2000=100). This is 1.9% below the all-time SA high of 131.0 recorded last November. On an annual basis, the April SA was up 4.8%, marking its biggest annual gains for any month in 2014. And on a year-to-date basis SA tonnage is up 2.9% through April.

    ***New EU Waste Transport Rules ....... as the Council of the European Union adopted an amendment to regulations concerning the shipment of waste within the EU and between the EU and third party countries. The new regulations strengthen measures to ensure more uniform implementation of the waste shipment regulation throughout the European Union. The regulations will enter into force twenty days after publication in the EU Official Journal and will apply after
January 1, 2016. 
Read More About The New Rules


    ***New EU Rules of The Road ...... as the European Conference of Ministers of Transport (ECMT) multilateral quota user guide has been jointly released by the International Road Transport Union (IRU) and the International Transport Forum at the OECD. The guide lists all documents required on board a vehicle performing transport operations under an ECMT multilateral licence. The new edition of the user guide reflects the introduction of the EURO VI Lorries into the system from
January 1, 2014 and provides a set of mandatory certificates for the latest categories of vehicles operating under the ECMT Multilateral quota.
Read & Download The New Guide

Vietnam Lightens The Road Load ....... as the government introduced a new law effective April 1st 2014 applicable for inland road transportation. The law states the total weight for containers (TEU & FEU) must not exceed 20 tons including tare weight of the container. These weight restrictions are based on structural defects of the bridges and streets. The Vietnamese authorities are serious about the law change as mobile weighbridges have been deployed on highways across Vietnam as of April 1st 2014 and around 800 trucks have been fined for carrying overloads. 

    ***New Perishable Brand ..... as C.H. Robinson has created a new global business brand named Robinson Fresh that brings its logistics and technology solutions around produce under one umbrella. The global giant was originally founded as a wholesale produce brokerage house in 1905.  

    ***FedEx Opens Package Lab ...... as its TechConnect division has opened a 30,000-square-foot package laboratory to provide testing and design services. The laboratory can simulate any part of the FedEx network, from desert climates to the rainforest to the
Arctic, according to FedEx. The company said the facility will provide free package testing for FedEx Express, FedEx Ground and FedEx Freight. UPS pioneered such a fascility many years ago.
Read More

   ***Human Trafficing ...... as May includes National Bike to Work Day, the exact center of May's National Bike Month. From coast-to-coast, cycling enthusiasts are expected to take part in a wide range of activities sponsored by environmental and civic groups, health organizations, and police departments. Across the
U.S., about 18% of the population over age 16 does at least some bike riding during the year, with an estimated 9 million bike trips in the country every day. Even in the face of rising gas prices, the vast majority of us — more than three-quarters — drive to work alone. Slightly over 5% use public transportation, and just under that percentage use bikes and other means to get to their jobs.
The Cargo Letter Financial Page ____________  

China. DOWN as first quarter net profit declined 62.7% year on year to US$14.8M.
  **A.P. Moller-Maersk (Danish conglomerate that owns Maersk Line) 
UP with  profit of US$1.2Bn fort 1st quarter of 2014, compared with US$790M it earned in same period 2013.  
  **APM Terminals (Maersk's standalone port operator) 
UP with a 29% year-on-year 1st quarter net profit increase to US$215M, drawn on revenues of US$1.1Bn, up 5%.
  **CEVA Logistics. 
DOWN as revenue dipped 8.9% annually at US$1.865Bn, and adjusted EBITDA saw a 7.3% increase to US$43M.
**Deutsche Post/DHL. 
UP with a 2.3% first quarter operating profit increase to US$995.38M.
CMA CGM. UP with a 1.2% first quarter year-on-year net profit increase to US$97M, drawn on revenues of US$3.9Bn, up 2.7%.
  **Hanjin Shipping. 
UP with a 37.2% year-on-year reduction in first quarter operating losses to US$58.1M.
  **Horizon Lines. 
DOWN with net net loss of another 30% in the first quarter to US$26.3M, drawn on revenues of US$251.9 million, down 3%.
  **Matson Lines. 
DOWN as first quarter profit fell 167% year on year to US$3.4M, drawn on revenues of $392.5M, down 0.56%. 
Montreal Port Authority (MPA). UP with a 19% year-on-year increase in operating profit to US$5.2M in 2013.
  **Neptune Orient Lines (NOL) (owns APL container shipping line). 
UP with a first quarter net loss of US$98M compared to a $76M year-on-year profit
U.S. Postal Servic. DOWN in its second quarter with a net loss of US$1.9 Bn dwarfing last year's loss of US$354M, as first-class mail volume continued to fall.
  **YRC Freight. 
DOWN as its national LTL unit's operating loss in Q1 was US$32.4M excluding interest and taxes, compared with a US$2.4M profit in the 2013 period.
  **XPO Logistics. 
UP with 1st quarter revenue of US$282.4, up 147.7% annually, while net revenue saw a 259.1% increase to $58.4M..

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

    ***Global Air Freight Rise ........ as volumes rose 3.2% year on year in the first quarter driven by improvements in world trade and economic recovery, says the Airports Council International (ACI). European airports exhibited the most significant air cargo performance in March, with total freight traffic up 6%, with the region's domestic freight growing 8.6% and international cargo rising by 5.9%. Strong overall air cargo growth was also seen in the Asia-Pacific region, up 5.2%, mainly due to strong first-quarter freight traffic performance at Shanghai Pudong International Airport, up 6.9%; Incheon International Airport, up 6.1%; and Hong Kong International Airport, up 5.6%. Total air freight tonnage in the
Middle East grew by 4.3% in March; North American air cargo volumes rose by 1.5%. However, cargo volume fell in both the Africa region, down 1%, and the Latin America-Caribbean region, down 2.2%.

   ***Sky To Sea Trend Seen ...... as air freight shifting to sea freight occurs because of the lengthening of product life so it matters less if a new gadget reaches retail shelves rapidly, said
UPS Asia Pacific forwarding chief Jeff McCorstin. Mr McCorstin said product innovation was declining in laptops, so obsolescence is also a declining risk, allowing for extended model life cycles and therefore greater transit time allotments. "Not only is the obsolescence risk declining, but retail product values are dropping so revenues no longer support the air freight expense," he said. Mr McCorstin said world trade volume growth had been positive since 2010, while figures from Drewry and IATA revealed world container traffic annual growth rates had been greater than air freight by a factor of 3-7 times. "As the global economy picks up there may indeed be a certain amount of modal shift back to air to the extent that cost cutting alone is driving trade down from air to ocean," he said."We do not see this shift to be significant based on the factors driving modal shift. What we're seeing, is that larger mode shift quantities are being driven by product life cycle changes in high tech and healthcare," he said. "In healthcare, the same factors are played out as high-priced brand pharmaceuticals are replaced by low-priced generic drugs," Mr McCorstin said. 

   ***MH370 Lessons ...... as in the wake of the disappearance of a Malaysian Airlines jet over the
Indian Ocean, the International Civil Aviation Organisation (ICAO) has developed an industry-wide plan to improve flight tracking. The blueprint developed during a meeting on global flight tracking also paves the way for addressing longer-term efforts. The new developments will be introduced by an Aircraft Tracking Task Force led by the International Air Transport Association (IATA). The ICAO will also start looking into the sharing of flight-tracking data and the implementation of industry-wide standards, reports the American Shipper. "Malaysia Airlines Flight MH370 has been an unprecedented event for aviation, and we have responded here in a similarly unprecedented manner," said ICAO president Olumuyiwa Benard Aliu. 
Ministry of Transport Malaysia -- Official Preliminary Report For Loss of Flight MH 370

    ***New Leg Record Set ..... as Qantas Airways announced that it will operate its non-stop Dallas/Fort Worth-Sydney flight with an Airbus A380 aircraft this fall. The 8,580-mile (13,800-kilometer) voyage became the longest scheduled commercial flight in the world by distance, after Singapore Airlines discontinued non-stop service between
Singapore and Newark and Singapore and Los Angeles late last year.  The two flights were 9,520 miles (15,300 kilometers) and 8,760 miles (14,100 kilometers) respectively.

    ***Lightening The Load, Not The Cargo ...... as Lufthansa Cargo is switching to lightweight LD3 containers to save fuel and reduce carbon dioxide emissions to reach its goal of cutting CO2 by one quarter over 15 years to 2020. The LD3 air containers are made of composite materials that make them 14 kiloss lighter, a weight saving of seven million kilos and an annual 2,000-ton reduction in fuel consumption with the movement of 500,000 containers. "The new, lighter containers are still extremely robust and strong in spite of being mostly plastic," said board member operations at Lufthansa Cargo Karl-Rudolf Rupprecht, reported
Atlanta area Air Cargo World.

    ***Good Bye ....... as the end of an era came at American Airlines as the wide-body jets serving its flagship transcon routes made their last flights, replaced by smaller, narrow-body Airbus A321Ts. The airline's last two Boeing 767-200s, planes that had been deployed on the highly-competitive routes linking
New York with Los Angeles and San Francisco, flew their final missions. The 767 was Boeing's first wide-body, twin-engine plane as well as its first with a two-crew glass cockpit.  Depending on the variant, it had a capacity from 181 to 375 passengers, and a range of 3,850 to 6,385 nautical miles. The final scheduled American Airlines 767-200 flight was Flight 30, which departed Los Angeles International Airport at 11:40 p.m. local time on May 7 and arrived at New York's John F. Kennedy International Airport the next morning at 8:01 a.m., six minutes later than planned.

    ***All The Buzz ...... as China Southern Airlines and Air New
Zealand cooperated on interlining of live honey bees from Auckland, New Zealand, via Los Angeles to Vancouver. During April and May, five shipments of live bees weighing 8.2 tons were transferred via LAX. The livestock interline project took four weeks. The honey bees originated in New Zealand. They were loaded in pallets containing 18 bee queens and 60,000 bees. A lot of heat was generated due to large number of bees gathered in a limited space, thus temperature control was the biggest challenge in the handling process; the temperature was required to be between 5-10 degrees Celsius (41-50 degrees Fahrenheit). In order to ensure the safety of the live bees, China Southern coordinated priority loading and unloading, airborne air conditioning and fast delivery at final destination.

>>> American Airlines Group's cargo ton miles (CTMs) amounted to 197.2 million, an increase of 12.9% compared to the same month a year earlier. >>> Cargolux has increased revenues in 2013 by 14.4% to US$1.98Bn, flying more than 900,000 ton kilometers as tonnage growth increased 16.7% to 753,848 tons in 2013 for Europe's largest scheduled all-cargo airline. >>> Hong Kong Int'l Airport (HKIA)'s cargo in April grew by 6% year over year to 362,000 tons as growth in cargo throughput was driven mainly by transshipments, which were up 18% from a year ago. During the month, cargo throughput to and from Mainland China improved most significantly compared to other key regions.                           

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

U.S. National Maritime Day , May 22 ...... ready for next year?

   ****Industry Upswing ......as the latest figures from liner shipping information company Alphaliner suggest an improvement in the container ship industry.
Alphaliner's weekly newsletter says the active boxship fleet is at its highest for some time. Alphaliner says the active containership fleet has surged to its highest levels since August 2011, as new ship deliveries and a reduction in the idle fleet have brought the total active capacity to a new record of 15 million TEU. 62 new containerships have been delivered so far in 2012, representing  a total capacity of 455,000 TEU. Of these new ships, 23 are larger than 10,000 TEU. This capacity increase has been partly mitigated by increased scrapping of older tonnage, with 55 ships (93,500 TEU) sent for demolition so far this year. Alphaline believes that as much as 200,000 TEU could be scrapped in 2012, but this will still remain a fraction of the delivered capacity, which is expected to reach 1,388,000 TEU. After a rise from a low of 0.5% in June 2011 to a peak of 5.8% in mid-March, the idle fleet is shrinking again, mostly through the reactivation of large units. The idle containership fleet has dropped sharply from 913,000 TEU in mid-March to 723,000 TEU as of 9 April. The idle fleet is expected to fall further in the next three months, with most of the ships of above 5,000TEU expected to be reactivated by summer.
Read More About Alphaliner

West Coast Port Strike?      as the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) began contract talks on May 12, with many contentious issues on the agenda. When the current contract expires on June 30, will they have a deal? Or will we see a repeat of 2002, when a 10-day lockout left dozens of ships lined up outside the West Coast ports, unable to unload? Stay tuned.

   ***Another Security Push Back .....as U.S. Homeland Security Secretrary Jeh Johnson has delayed for two more years new rules requiring all cargo containers entering the
U.S. to be security scanned prior to departure from overseas amid questions over whether this is the best way to protect U.S. ports. The decision takes into account the significant costs involved to implement the technology and lack of supporting facilities at foreign ports to enable such screening for radiological materials and nuclear weapons. The implementation deadline had already been delayed from 2012 to July 1, 2014. The Department of Homeland Security (DHS) will instead aim to increase the percentage of containers scanned abroad, with the emphasis on high-risk cargo, thought to represent less than 1% of U.S. bound containerized cargo.

     ***SOLAS Convention Gains Weight ....... as in September 2013 the IMO Sub-Committee on Dangerous Goods, Solid Cargoes and Containers Committee gave its support to the proposal on the verification of container weights prior to shipment, amending the so-called SOLAS convention. The Safety of Life at Sea (SOLAS) convention that will require verification of container weights before loading. On
May 19 2014 the International Maritime Organisation (IMO) Safety Committee finally approved. The amendment to SOLAS still has to be adopted by the IMO's Maritime Safety Committee (MSC) at the meeting in November 2014. If adopted in November, these measures will enter into force in July 2016. A statement from the World Shipping Council, a group representing owners and ship managers, said misdeclared container weights "have been a long-standing problem for the transportation industry and for governments as they present safety hazards for ships, their crews, and other cargo on board, workers in the port facilities handling containers, and on roads."

   ***New Security Seal Standards ....... as according to a recent bulletin published by U.S. Customs and Border Protection (CBP), the new standard applies to all participants in the Customs-Trade Partnership Against Terrorism (C-TPAT) because C-TPAT security criteria require the use of high security seals meeting the current ISO 17712 standard.  Specifically, the applicable criteria state "… a high security seal must be affixed to all loaded containers bound for the U.S." and "All seals must meet or exceed the current ISO 17712 standards for high security seals."  CBP did not specify a particular implementation deadline, allowing the industry time to transition to the use of the new seals once old seal stocks have been depleted. The new standard includes a change to the so-called Clause 6 requirements for the tamper-evident aspects of high security seals.  Notably, a manufacturer may conduct testing of the tamper-evident aspects of its seals either in-house or by employing a third-party testing laboratory that applies the manufacturer's test criteria and procedures.  In addition, to be compliant with the new standard a high security seal must have a unique number (and may have an optional barcode), must have the company name or logo indicated on the seal, and must be marked or stamped to identify its classification as high security ("H") .    
Read Full Details of The New Standards For High Security Seals

    ***New Cargo Transport Unit Code ....... as the MSC (IMO Maritime Safety Committee) approved on May 19th 2014 the new Code of Practice for the Packing of Cargo Transport Units (
CTUs), including intermodal shipping containers. The new CTU Code, which will replace the current IMO/ILO/UNECE Guidelines for packing of CTU, has already been approved by the UNECE (United Nations Economic Commission for Europe) and will now go to the ILO (International Labour Organisation) for approval.
Learn More About The New Code Practice

   ***Closing The Coast Guard? ........ as South Korean President Park Geun-hye formally apologized on 19 May for the 
M/V Sewol ferry disaster last month that killed about 300 passengers, mostly school children, and said she would break up the Korean Coast Guard because it had failed in its rescue mission. Park has been hit hard by an angry nation-wide outcry over the government's response to South Korea's worst civilian maritime disaster in 20 years and the seemingly slow and ineffective rescue operation. At least 286 people were killed and 18 remain missing. Only 172 people were rescued, with the rest presumed to have drowned. Of the passengers, 339 were children and their teachers on a field trip from a high school on the outskirts of Seoul. Park fought back sobs as she remembered some of the teenagers who perished while trying to help each other.
Read More About The Korea Coast Guard Military Police Agency

   ***New Gates For The Big Ditch ....... as the Panama Canal Authority (ACP) is expecting the Marshall Islands-flagged heavy lift ship 
M/V Sun Rise, en route from Trieste to deliver four new gates for its third set of locks by mid-June depending on weather conditions. "This is another important milestone towards the completion of a project that will have an important impact on the international maritime community," said Panama Canal administrator Jorge Luis Quijano. This is the 2nd shipment of gates being transported to Panama. Four other gates arrived in August 2013. The Panama Canal Expansion Program is 74% complete.

    ***P3 Alliance Retools ......as members  Maersk, MSC and
CMA CGM, are expected to amend a number of their originally proposed joint services, with commencement of services delayed until the second half of 2014, reports Alphaliner. Delays in obtaining the necessary regulatory approvals have postponed the start of the services until an undetermined date, and the official network has not been officially confirmed, said the report. Among the key changes expected are the removal of one Far East-U.S. east coast string via the Panama canal, and the addition of one North Europe-U.S. east coast service. On 18 June 2013, Maersk Line, Mediterranean Shipping Company S.A. and CMA CGM agreed in principle to establish a long-term operational alliance on East – West trades, called the P3 Network. The P3 Network will operate a capacity of 2.6 million TEU (initially 252 vessels on 28 loops) on three trade lanes: AsiaEurope, Trans-Pacific and Trans-Atlantic. The aim is to improve and optimise operations and service offerings. While the P3 Network vessels will be operated independently by a joint vessel operating center (Network Center), the three lines will continue to have fully independent sales, marketing and customer service functions., according to a Maersk statement.

    ***Chiquita Brands Goes Home ......as after a nearly 40-year hiatus, the major American producer and distributor of bananas is returning its shipping operations to the
Port of New Orleans from Gulfport, Mississippi. For this, Louisiana will provide Chiquita a grant of US$18.55 per TEU to offset increased shipping and handling costs at New Orleans, and invest US$2.2M in a port-owned distribution/ripening facility to be leased to Chiquita. The Port of New Orleans will also invest US$2M for refrigerated-container electrical infrastructure and rehabilitation of a container freight warehouse to accommodate the project. Chiquita relocated its shipping operations from the Port of New Orleans to the Port of Gulfport in the mid-1970s after more than seven decades of calling at New Orleans. The move is expected to result in 270 to 350 new permanent jobs in New Orleans. Chiquita expects there with also be 30,000 to 39,000 TEU of outbound cargo. The company shipments in New Orleans are expected to begin by the first quarter of 2015, according to the American Journal of Transportation.
History of Chiquita's Great White Fleet

    ***Vietnam Levels Charges ....... as it has accused China of deliberately ramming two of its vessels in a disputed area where Beijing has built a giant oil rig near the Paracel Islands of the South China Sea, controlled by China but claimed by Vietnam. According to
Vietnam's foreign ministry, the Chinese vessels used air support and water cannon to intimidate leading to six other vessels being hit but not as badly as the two Vietnamese Sea Guard vessels. The China state-run oil company CNOOC's has been asked to remove the drilling rig by Hanoi due to its position in what it believes are waters controlled by Vietnam rather than China. The pot is now boiling as more pushing and shoving near the Paracel Islands in the South China Sea resulted in the sinking of a Vietnamese fishing boat after it was allegedly rammed by a Chinese vessel on 27 May 2014.

   ***China River Traffic Surges ...... as waterways posted a 10.4% year-on-year increase in overall cargo volume to 5.59 billion tons in 2013, according to the latest statistics from
China's Ministry of Transport, reports Xinhua. Waterway cargo turnover in the year climbed 4.8% to 7.94 trillion tons per kilometer. China's waterway passenger movements in last year totalled 235 million people, up 3% year on year. Inland river cargo volume reached 3.23 billion tons with the turnover hitting 1.15 trillion tons per kilometer. Coastal cargo transport volume was 1.64 billion tons. The cargo turnover came to 1.92 trillion tons per kilometer. Ocean transport cargo volume achieved 712 million tons. The turnover was 4.87 trillion tons per kilometer. Meanwhile, China's rail freight posted 1.7% year-on-year growth in 2013 to 3.96 billion tons with the turnover volume rising 0.2% to 2.9 trillion tos per kilometer, while its rail passenger volume surged 10.8%.

    ***Rebranding At MarAd .......as the
U.S. the Maritime Administration (MarAd) has reorganized its Office of National Security into the Office of Strategic Sealift. The re-branded office comes with three areas of focus — maritime workforce, and federal and commercial sealift, according to a MarAd press release.   

    ***Schneider Logistics Settles ...... as it will pay US$21M to settle a class-action civil lawsuit brought by about 1,800
Southern California dockworkers who claimed they were not paid properly. A "notice of proposed settlement" was filed May 13th in the U.S. District Court of Judge Christina Snyder in Los Angeles, and was signed by lawyers for Schneider, Wal-Mart Stores and the plaintiffs. Terms of the settlement were worked out after two days of nonbinding mediation between the parties in San Francisco. The case was filed in 2011 based on actions dating to 2001.

   ***Shipping Six Packs ...... as three cars into a container once involved wooden supports and manpower, but now its possible get six cars in an high cube box using a rack, according to Consolidated Car Shipping (CCS). CCS offers a racking system for the benefit of freight forwarders and automotive shippers. They have been using racks to and from the
UK to fit out containers, transporting a variety of high-end vehicles. Racking can be assembled inside high cube containers by two men, who can load four cars in 75 minutes. Several companies are already working with CCS with an estimated saving of more than two hours per container loading compared to wood, along with the added bonus that the racks can be returned as FCL or LCL.

>>> Port of Antwerp first quarter volumes rose 0.9% to 2.1 million TEU, but the 2.1% increase in container weights to 26 million tons exceeded growth in the number of boxes. >>> Port of Charleston container volumes for April set a six-year record at marking the busiest month since May 2008, the South Carolina Ports Authority said May 22.with 151,790 TEU and 1.374 million TEU in its fiscal year. >>> China ports posted a 7.2% year-on-year increase in overall container throughput nationwide to 190 million TEU in 2013. >>> Port of Hamburg has posted a 9% increase in 1st quarter container volume to 2.4 million TEU, with more than half - 1.3 million TEU - attributed to trade with Asia.  >>>  Poland's Port of Gdansk's volume increased 7.1% year on year to 1.15 million TEU in 2013, while first quarter throughput was up 28% to 308,539 TEU. >>> Hong Kong port handled 1.96 million TEU in April, representing a year-on-year increase of 10.3% from 1.78 million TEU in April last year. >>> Port of Los Angeles total volume was up 10.3% year-on-year to 706,036 TEU, marking the port's busiest month since September, while Port of Long Beach rose 9.7% to 569,843 TEU.  >>> Three Gorges Dam on the Yangtze River posted a single monthly record high of 10.33 million tons in April, 1.88 million tons more than it did in the same period last year. >>> Port of Xiamen in Fujian province at 8.01 million TEU has surpassed the  U.S. west coast giant Port of Los Angeles (7.87 million TEU) and the Port of Tanjung Pelepas (7.63 million TEU).

    ***This Month In
U.S. Navy History
1775 - Force under Ethan Allan and Benedict Arnold cross
Lake Champlain and capture British fort at Ticonderoga, New York.
1801 - Tripoli declares war against the United States
1844 - 
USS Constitution sails from New York on round the world cruise 
1919 - Three Navy flying boats begin 1st trans-Atlantic flight from Newfoundland
1942 - Battle of Coral Sea, first carrier vs. carrier battle, begins
1945 - Japanese attempt to land on Okinawa repulsed; kamikaze attacks damage 6 U.S. Navy ships
2012 - Port of Los Angeles Harbor Commissioners voted unanimously to create a new home for the historic battleship  
USS Iowa (BB-61).
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 Oct. 2010: "How To Join Your Tuna"

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>>>>>>

Airforwarders Association Online Class: H8u—Air Shipment of Lithium Batteries, in depth (I
CAO Int'l Rules + further U.S. restrictions)

Airforwarders Association Online Class: Introduction to U.S. Export Controls & AES Procedures

Columbus' Santa Maria May Have Been Found off Haiti

Did You Know? Increddible Trade Statistics --Video Produced April 2014 ....... If you lined up all the containers for Maersk alone, they would stretch 11,000 miles!

Flying A Fallen Hero On Memorial Day

IMO's Maritime Safety Committee Guidance On Navigating Malacca and Singapore Straits

International Federation of Freight Forwarders Associations ...... the new website

Maritime TV: Thoughts on the 
M/V Sewol Korean Ferry Disaster

Maritime TV: MARAD National Maritime Strategy Symposium from May 6, 2014. Includes presentations from U.S. Secretary of Transportation Anthony Foxx.

Transport Security & Safety Trends eBook

White House Statement on Putin And The Ukrane

U.S. & Uruguay to Sign Customs Mutual Assistance Agreement 

U.S. Customs & Border Protection - Modification of National Customs Automation Program (NCAP) Test of Automated Commercial Environment (ACE) Cargo Release for Truck Carriers



Pallet Gates


Transport Events


Trade Shows, Exhibitions, Conferences & Business Events Worldwide

World Trade Organization Events

33th Annual Western Cargo Conference --
WESCCON......16-19 Oct. 2014, San Diego

2014 IANA Intermodal
EXPO ....... 21-23 Sept. 2014, Long Beach, CA

Africa Ports and Harbours 2014 .........1-2 July 2014, Johannesburg

Africa Rail 2014 .........1-2 July 2014, Johannesburg, South Africa

Color Photographs of the Hindenburg

Customs Broker Boot Camp ........2-5 June, San Antonio, Texas

E-Navigation Revolution 5th Annual Conference and Exhibition.......11-12 Nov., 2014 –London, UK


FIATA World Congress 2014 ........13-18 Oct. 2015, Istanbul, Turkey

FNC International Freight Conference 2014 Singapore ........12-14 June 2014, Singapore

Freight Forwarders Conference 2014 .........12-14 June 2014, Singapore

Maritime Innovation and Technology ........ 16-17 Oct. 2014, Malta

The Cargo Show Africa 2014 ......... 30 June - 3 July 2014, Johannesburg

TOC Europe 2014 ........24-26 June 2014, London

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

Cleverbot .......Talk to an app with Actual Intelligence! Say anything you like and it will reply. Make a friend! Roleplay, lyrics, jokes!

General Interest>>>>>>>>>

10 Unique BBQ Ideas

31 Air Traffic Control Towers With Surprising Charm

A Brief History of British Rail Travel

Adult Ascience Quiz ...... only 7% of Americans get all 13 questions right

An Island Hopper Adventure Unlike Any Other

Autonomous Octo-Copter Transport Truck - Amazing.

Container Homes

Elmer A. Sperry: Pioneer of Modern Naval Tech

F-35B Accomplishes First Night Vertical Landing Aboard USS Wasp

General Motors Tunnel of Love -- GM Heratage Center 

Hazmat Highway to Hell with High Pressure Gas Cylinders

How Does He Do That ?

Old Neon Signs and Great Ford Cars

University of Texas at Austin 2014 Commencement Address -- Remarks by Naval Adm. William H. McRaven, BJ '77, ninth commander of U.S.Special Operations Command

Virtual D-Day Created Seventy Years On

Spy Plane Fries Air Traffic Control Computers, Shuts Down LAX -- May 2 2014


What is a #Hashtag? -- #Hashtags 101

What Is Your Brain Age?

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

Pyramid Tech. v. Hartford Cas. Ins. Co.
U.S. Ninth Circuit Court of Appeals
19 May 2014, Case No. 11-56304
OPINIONS AS EVIDENCE: Expert testimony that meets the standards of the Federal Rules of Evidence is admissible in court for a trier of fact to determine its correctness so long as a court deems the opinions to be based on sound methodology and relevant principles within the expertise of the aficionado.

Pyramid Technologies, Inc. ("Pyramid") was storing older electronic parts in a warehouse. Pyramid purchased insurance from Harford Casualty Insurance Company ("
Hartford") with the foresight to cover replacement costs for their business, buildings, and electronic parts if ever needed. The building later flooded and there was some condensation found on some of the bags that were storing some of the electronic devices. Pyramid then contacted their insurance carrier to report the problem, but Harford's expert stated there was no water damage, and Pyramid could not collect on the policy. As a result, Pyramid hired experts to testify to the contrary. The district court excluded all of Pyramid's expert witness testimony, reasoning that the experts were not qualified and had no plausible explanation, making them unreliable. The Ninth Circuit reviewed the expert testimony for admissibility and reliability in order to determine if each of the three experts that Pyramid called where satisfactory. The panel determined both admissibility and reliability were based on factor tests and that the trial court was to act as a gatekeeper in order to determine whether the information should be entered into court, but not necessarily whether the experts were correct in their assertions because a jury is the ultimate trier of fact. As a result, the panel found two of the three experts that Pyramid called to testify to be admissible in court. Additionally, the panel found that a jury could reasonably infer damage did, in fact, take place, and it could logically be connected to the flood based on the theory of "efficient proximate cause." AFFIRMED in part, REVERSED in part, and REMANDED for trial.

Note: The specialist nature of logistics cases often require the use of experts to explain the unique practices, procedures and standards of our industry. However, the legal requirements for serving as an qualified expert are often misunderstood. The usual qualification standard to be met is not limited to formal education alone, but also takes into consideration the special knowlege, skill, training and experience of the potential expert witness (for example, Federal Rules of Evidence, Rule 702). The best expert witness for your next lawsuit or visit to Small Claims Court just may be an experienced employee of your competitor or an officer of your local logistics association. Consider all the available industry resources when addressing your next legal situation or contact the 
Countryman & McDaniel attorneys.

Read the full court opinion: 
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.

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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.

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