Industry News
From The Cargo Letter


Air & Ocean Freight Forwarder - Customs Broker News
17 March 1997

Good St. Patrick's Day Morning from our Observation Deck...... overlooking the officially designated "Cargo City" area and....... Runway 25-Right at Los Angeles International Airport. This week we limit news articles and shift focus to new World Wide Web Sites in our Cyber Ports Of Call feature. These new WWW sites should prove helpful for your business. Contribute your knowledge & e-mail to The Cargo Letter.

Michael S. McD, Editor

INDEX to The Cargo Letter:

  1. OUR Top Story
  2. First Legal China Taiwan Sailing Completed; Strange Happenings In Cross-Straits Relations
    OUR "A" Section: FF Trade & Inland News
  3. Freight Forwarder Trade Briefs
    OUR "B" Section: FF World Air News
  4. FF World Air Briefs
    OUR "C" Section: FF World Ocean News
  5. FF World Ocean Briefs
  6. The Cargo Letter Cargo Damage Dispatches
    OUR "D" Section: FF in Cyberspace
  7. The Cargo Letter "Cyber Ports Of Call" OUR "E" Section: The Forwarder/Broker World
  8. NVOCC Wins Important Federal Case


OUR Top Story

1. First Legal China Taiwan Sailing Completed; Strange Happenings In Cross-Straits Relations

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

The M/V Lianfeng, a ship of Chinese ownership and Panamanian registry, made a direct voyage from Xiamen to Kaohsiung on March 2, becoming the first ship in over 40 years to do so without first stopping at a neutral port.

Earlier this year, China and Taiwan agreed loosely that ships could make direct calls from China to Taiwan, provided that they were owned by China or Taiwan but flew a third country's flag, and that their cargo did not have to clear Taiwan Customs.

The event was one of two very unusual events spanning the Strait of Taiwan over the past weeks.

On March 10, Liu Chan-shung, a 45-year-old Taiwanese journalist, doused himself with gasoline while on a domestic flight from Kaohsiung to Taipei, and threatened to set himself on fire unless the plane was diverted to China. The Far East Air Transport B-757, with 158 passengers and crew, diverted to Xiamen, where Liu was arrested, despite his request for political asylum in The People's Republic. The plane was refueled and then released to resume its flight to Taipei. There were no injuries reported.

Liu, a reporter for a newspaper in Taipei, was recently fired from his previous assignment in Hualien, Taiwan, after destroying his computer terminal. In his request for asylum in China, Liu claimed to have been "politically oppressed" in Taiwan. [Editor Note: The Cargo Letter continues to present stories geared to the changes we may see at the stroke of midnight on 1 July 1997, when Hong Kong transfers to ownership of the P.R.C.]


OUR "A" Section: FF Trade & Inland News

2. Freight Forwarder Trade Briefs


OUR "B" Section: FF World Air News

3. FF World Air Briefs


OUR "C" Section: FF World Ocean News

4. FF World Ocean Briefs

5. The Cargo Letter Cargo Damage Dispatches

-- by Steve Schultz for The Cargo Letter

1.) The container ship M/V California Orion, operated by Nippon Yusen K.K., collided with a gantry crane at the Port of Oakland on 7 Feb., ex Los Angles and during docking at Berth 23 when the pilot suffered "severe intestinal distress.", leaving a student pilot as the master in command. When the pilot returned 8 minutes later, the ship was on course to ram the crane, sustaining U.S.$250,000 in damage and out of service for a week; 2.) M/V Bogasuri Dua (Indonesian 20,495 tons) was pushed by high winds and collided with six tugs, sinking one of them on 17 Feb. at Surabaya, Indonesia; 3.) CO SCO's M/V Bright Field ......destroyer of the New Orleans Riverwalk last December .......suffered a freak fire on 19 Feb. while in repair yards at Violet, La.; 4.) the containership M/V Galapagos took water and sank on 20 Feb. 195 miles south of Jamaica after the U.S. Coast Guard Hamilton-class High-Endurance Cutter U.S.C.G.C. Gallatin (WHEC 721) arrived on scene to save the crew; 5.) a 21 Feb. galley fire aboard M/V Inishfree (Irish) early 21 Feb. killed 1 and severely injured 3 at Newport, Wales; 6.) On 23 Feb. M/V Kinei Maru No. 18 (Japanese 3,066 ton dry cargo1985) sank off Hirado, Nagasaki, with all five crew members rescued after boarding a life raft; 7.) M/V North Pacific (Singaporean 104,966 ton tanker) ran aground 23 Feb., southeast of Gedser, Denmark with 84,000 tons of crude oil.; 8.) a 28 Feb. fire & explosion in M/V Miden Agan (Cypriot-registry 21,586 ton containership built 1982, operated by Hellas) killed 5 people and injured 4 at Shanghai; 9.) M/V Kangson sank with the loss of 3 crew at the mouth of the Yangtze River on 28 Feb. after colliding with M/V Meiguihai (COSCO Qingdao); 10.) M/ V Sapphire (Maltese, built 1982) was abandoned after a 5 March fire in the Mediterranean north of Algeria; 11.) 28 Feb. was also a bad day for M/V Isla Mindoro (Philippine 2,981 tons) which suffered two collisions in a 12 hour period in the Sea of Japan; 12.) M/T Ocean Swallow (Japanese 54,000 ton tanker) collided with M/V Taisho Maru (Japanese 3,200 ton) on 1 Mar., southeast of Yokohama, Japan; 13.) the brand new container vessel M/V Vikartindur (German 8,633 ton, built 1996) has 1 crew member missing and 1 injured as the result of engine failure and subsequent grounding in heavy seas off Iceland on 5 March ........latest reports on 8 Mar. are that at least 40 containers have gone overboard and that the vessel has broken her back, now suffering a list of 40o to starboard. A team is in route from the Netherlands to help salvage remaining cargo containers; 14.) M/V Disarfell (Antigua 516-TEU) sank 9 March near Iceland, loosing all her containers; 15.) M/V Waintai I (Singaporean) boarded by PIRATES off eastern Malaysia on 10 March who stole its navigation equipment. >>>>>>.........and finally ....... the as yet unsold H.M.Y. Brittania (the Royal Yacht ....see The Cargo Letter [312]) was damaged in a collision with the R.F.A.S. Bayleaf (A 109), a Royal Fleet Auxiliary Appleleaf-class Transport Oiler, during at sea replenishment in the Straits of Hormuz as she sailed from Doha, Qatar, to Karachi. [EDITOR NOTE: Most certainly this story stands as proof that your customers need quality marine cargo insurance for their shipments.]


OUR "D" Section: FF in Cyberspace

6. The Cargo Letter "Cyber Ports Of Call"

The Cargo Letter Air Sites

The Cargo Letter Ocean Sites

The Cargo Letter Business Sites


OUR "E" Section: The Forwarder/Broker World

7. NVOCC Wins Important Federal Case

-- By Michael S. McDaniel for The Cargo Letter

LAX - 15 March 97 - In mid February 1997 began a major U.S. District Court trial at L.A. concerning the US$1.5M claim of a CGNEE against the NVOCC (freight forwarder) & COSCO Line (custodial carrier) for damage to 24 X 40' reefer containers (24 refrigerated containers) laden with Chinese White Garlic moving ex Qingdao, China for discharge at Los Angeles in late 1993. There was little doubt that the 500 metric tons of garlic, a perishable commodity, had begun to "sprout" and therefore was of less value (according to the defendant carriers) or was worthless (according to the CGNEE plaintiff.). Michael S. McDaniel, Esq. of the Countryman & McDaniel law firm represented the NVOCC.

Claimant alleged that both the NVOCC & the custodial ocean carrier (COSCO Line) were responsible for loss because damage occurred while the cargo was carried un-refrigerated during the inland leg from shipper's door to the port. It was alleged that the carriers failed in their duty to supply "gen sets." (generator sets) in order to have powered the reefer containers and thereby cool the cargo during its 200+ miles move to the Port of Qingdao.

The garlic commodity needed a "cold chain" of continuous cooling after harvest in order to prevent sprouting. In our case it became clear that the 37,000 cases of garlic cloves had begun to sprout because of exposure to ambient heat, likely before electrical hook-up for the reefer containers at the Qingdao Container Yard (a gov't operated yard).

However, a major problem for claimant's theory was that the 24 CTNRs had moved on a CY/CY (container yard to container yard) basis. On a CY/CY mo ve the requirement is "bring your cargo forward" for the shipper. From where the cargo might come, the NVOCC (freight forwarder) does not know. Thus, CY/CY shipping instructions mean that the carriers are only responsible for cargo AFTER it arrives at the origin port CY, and UNTIL delive ry at the CY in the destination port.

The NVOCC's Question was: Given that the containers are simply made available for shipper's use at the CY (to haul out & load elsewhere), how would the carrier know where container stuffing (loading) was to occur, or if "gen sets" were required, etc.? The shipper's office address as set forth on the shipping doucuments has no particular relation to where the cargo may be located. Indeed, shipper addresses are often stated at a city or even on a continent which is distant from the actual cargo origin point. The NVOCC proved that it had not been requested to supply pre-CY services, arguing that the garlic might simply have been stored at a port warehouse and been stuffed into the reefer containers there.

Trial evidence suggested that the Chinese shipper itself had contracted dry trucks to move the 500 tons of garlic from the inland city of Jining to the port. If so, the reefer containers never even left the port area.

Still, it was the theory of this defeated plaintiff CGNEE that the NVOCC had some unidentified, special obligation to investigate, to find out the cargo origin and to determine the conditions under which this cargo would be carried to the port. No such duty was found to exist according to U.S. District Court Judge J. Spencer Letts, and based in large part upon the expert testimony of noted international transport & trade consultant Jeffrey Amos.

In view of the plaintiff's theory of some failed carrier duty to provide "gen sets", it is ironic that few, if any "gen sets" had even existed at Qingdao in 1993 according to expert testimony offered by the carriers.

Other issues were present in the case, such as pre-shipment condition for this garlic, based it its age. But some issues were never addressed in the trial ...... although the carriers were very prepared to do so. While certain of these issues were of the great importance, maritime cases take on their own life and tend to concentrate on matters of concern to the court. There is no jury in a maritime case.

EDITOR NOTE: While this case is instructive as to issues of NVOCC/carrier duties, it is important to remember that any shipment must stand on its own unique facts and that even federal judges may disagree on the ultimate meaning of evidence presented. When a large or critical shipment is involved, it is a good practice to get the shipping instructions in writing. [an error occurred while processing this directive]