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Industry News
From The Cargo Letter

THE CARGO LETTER [325]
Air & Ocean Freight Forwarder - Customs Broker News
13 January 1998

Happy 1998 from our Observation Deck...... overlooking the officially designated "Cargo City" area and....... Runway 25-Right at Los Angeles International Airport. Welcome to Mr. Richard Steinke, newly appointed Director of America's largest, our Port of Long Beach ! Did you hear the one about DSL? Did you have containers aboard M/V Merchant Patriot? .... and will Asian air carriers still transport passengers in the future? Read about our industry trends in The Cargo Letter.

Contribute your knowledge, stories & company information ........ by e- mail to The Cargo Letter. We strive to bring you useful information which is timely & topical.

Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel, the forwarder/broker attorneys at LAX.

NOTE: The Cargo Letter is designed to be read using a 12 point Geneva font on a standard 6 inch e-mail field. Our TECHNICOLOR edition requires AOL v3.0 or better.

INDEX to The Cargo Letter:

OUR "A" Section: Trade, Financial & Inland News
 1. BAX Global Inc. To Acquire DSL
    * A Big Move For Burlington
 2. BXA Update West '98 To Kick Off At LAX
 3. Freight Forwarder Trade Briefs
 4. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
 5. Freight Forwarder World Air Briefs
OUR "C" Section:  FF World Ocean News
 6. FF World Ocean Briefs
 7. The Cargo Letter Cargo Damage Dispatches
OUR "D" Section: FF in Cyberspace
 8. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
 9. New Argentine Pre-Shipment Inspection Regs.
    * You'll Need To Be An Accountant

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

1. BAX Global Inc. To Acquire DSL

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

SEATTLE (Jan. 7) -- BAX Global Inc., (formerly Burlington Air Express) the operating unit of the Pittston Burlington Group (NYSE: PZX) announced on December 17 an agreement to acquire the privately-held Distribution Services Ltd. (DSL) and an affiliated company for a cash price of US$76M.

DSL is the well known ocean freight forwarding, contract distribution & logistics warehousing company serving trade routes between the Asia Pacific Region & North America. DSL has major headquarters facilities at Los Angeles, California & Tsing Yi, Hong Kong, and owns 94 offices & 80 container freight stations in 59 countries, with a major presence in China.

Cobb Grantham, CEO & Managing Director of DSL, said, “This acquisition is a perfect fit for both companies because there is no duplication of services; just two strong industry players coming together to provide even greater, more comprehensive distribution services.”

While DSL will continue to operate as an ocean NVOCC, BAX Global’s strengths in domestic freight handling, exports and air freight forwarding are expected to promote DSL as a full-service forwarding and logistics company. The acquisition will enable DSL to compete on even ground with competitors who have long been able to trump DSL’s strong ocean card with their under-one-roof services.

In an interview with The Cargo Letter, John Clarke, Corporate director of Business Development for DSL, said, “This is very good news for both companies. What’s been missing for us has been a strong air freight program. We will like being an independent ocean arm of BAX Global.”

The DSL combined revenues of approx. US$180M, in service to customers such as Wal-Mart stores. [NOTE: This week Wal-Mart designated Emery Worldwide as its primary air freight carrier.] The DSL acquisition is part of BAX Global's strategy to expand its presence in the growing ocean freight market.

“We expect to see business as usual into the foreseeable future,” commented one DSL regional manager, “but who knows what’l be 8 to 10 years down the pipeline?”

DSL plans to keep its successful broker-partner arrangements with their current roster of independent brokers and forwarders throughout North America. In a letter to broker partners, Grantham stated that BAX Global is sensitive to conflicts with the DSL broker partners, and that it is their desire to continue those business relationships. BAX Global operates 16 brokerage offices in the U.S., primarily as a convenience to their existing import customer base.

The agreement is subject to BAX Global's satisfaction concerning due diligence, board & regulatory approvals, and other rights of either party to terminate, with a potential closing by the end of January 1998. BAX Global intends to maintain the DSL organization substantially intact and operate it as a separate entity.

More information on these companies can be found via the Internet at: http://www.dslasia.com and http://www.baxglobal.com

2. BXA Update West '98 To Kick Off At LAX

The once a year event is scheduled for February 10 - 11, 1998 at the Sheraton Universal Hotel in Los Angeles, CA. and is sponsored by the Federation of International Trade Associations. Upwards of 500 business executives & professionals throughout the U.S. & overseas who have a need to know about export licensing policy, export regulations and trends will attend, plus U.S. Commerce Dept. officials & BXA licensing officers, representatives of other federal, state, local and even foreign government agencies.

Update West '98 will highlight regulations with programs to cover licensing policies/procedures, trade policy & government programs available to exporters, including:* Encryption * Wassenaar Arrangements * Defense Trade Advocacy * Enforcement * Export Management Systems * The Non-Proliferation Regimes * Technical Data * Shipper's Export Declaration * License Exceptions & Special Country Policy.

The registration fee for BXA Update West '98 of US$425 includes conference registration, course materials, a continental breakfast each morning, daily lunches, & a gala hosted reception. For information, call the Federation of International Trade Assns. (FITA) toll free at (800) 969-3482. To obtain a registration form via FAX, call toll free (800) 926-3482 and request document 707. The FITA web site: http://www.fita.org

3. Freight Forwarder Trade Briefs

4. The Cargo Letter Financial Page

OUR "B" Section: FF World Air News briefs

5. Freight Forwarder World Air Briefs

OUR "C" Section: FF World Ocean News

6. Freight Forwarder World Ocean Briefs

7. The Cargo Letter Cargo Damage Dispatches

M/V Merchant Patriot Hangs On ............. as the Hong Kong-registry 17,028-gt, 21,310-dwt, 493-foot general cargo ship operated by Cenargo Ltd. began flooding 30 Dec., 310 miles east of Cape Canaveral, FL. Weather conditions included seas up to 20 feet & winds gusting to 50 knots. The crew of 28 jumped overboard after the ship's lifeboat was knocked off the stern and conditions ruled out helicopter hoists from the ship's deck. Two HH-60G Rescue Hawk helicopters from the U.S. Air Force Reserve's 920th Rescue Group at Patrick AFB, FL.; two HH-60J Jayhawk copters from U.S. Coast Guard Air Stn. Clearwater, Fla.; & a Jayhawk from the Coast Guard's Operation Bahamas in Nassau, rescued the crew from the water. It was planned to transfer them to M/V Pearl Ace (Mitsui O.S.K.), which had diverted to the area after being contacted by the Automated Mutual Vessel Assistance Rescue System (AMVER). However, given weather conditions, crew were flown to Marsh Harbor, Great Abaco Island, the Bahamas. M/V Merchant Patriot was sailing from Praia Mole, Brazil, to Savannah, Ga., with cargo containers & steel project cargo. A seawater pipe in the vessel's engine room burst and flooding went out of control after a patch failed. Some containers have reportedly been lost. She was last was last reported to be under tow by the tugs Maasbank (Dutch) & Samand to Freeport, the Bahamas. We pray for calm seas.

Other cargo disasters of the month include ...........

1.] 3 Dec. M/V Promex Cita (11,599-dwt) sank off Ly Son Island, Vietnam. The ship was carrying granite floor tiles from China to Indone r the damage, the ship sailed towards the Vietnamese coast before it sank in 100 feet of water;
2.] 7 Dec. M/V Celtic Warrior (Bahamian) sank off Cape Sounion on Agios Georgios Island, Greece. The ship had collided with the M/V Annegret. The 9 crew of the Celtic Warrior, all Polish citizens, were rescued by the Annegret. Celtic Warrior remained afloat 5 hours. Several containers were reported floating in the area after the ship sank;
3.] 7 Dec. M/V Megane (St. Vincent), carrying timber, sank in a storm 80 miles off Sicily, Italy. The master & 12 crew were rescued from 2 lifeboats;
4.] 9 Dec. M/V Kashi Maru No. 8 and M/V Settsu Maru No. 5 collided off Japan's Izu Peninsula. The Kashi Maru No. 8 subsequently drifted and sank near Higashiizu, Japan, as the result of heavy damage on its port side amidships. Some of the ship's fuel spilled. Each ship had 5 crew but no one was injured.
5.] 12 Dec. M/V Buffalo (11,619-gt, American Steamship Co.) struck the Detroit River Lighthouse in Michigan, causing the bow to be crushed in, extending from below its anchors to below the waterline. The ship took on water but was allowed to proceed to Toledo Shipyard. Weather conditions included clear visibility with seas up to 3 feet. The lighthouse's stone foundation had minor damage;
6.] 13 Dec. M/V Equator Joy (Singaporean- general cargo ship) was abandoned at 03 degrees 12 minutes north, 108 degrees 56 minutes east, after it began sinking. The 18 crew were rescued and taken to Singapore;
7.] 13 Dec. Belgium has arrested the master of M/V Ocean Transporter (Turkish-registry), which collided with F/V Noble Art (French- registry) off Brittany. The Noble Art sank 4 hours after the collision and the Ocean Transporter ignored a French order to return to assist, saying that it was carrying urgent cargo. The Ocean Transporter sailed to Ghent, Belgium, where the ship arrived 16 Dec. and unloaded Brazilian soya;
8.] 14 Dec. M/V Canadian Explorer and M/V Island Skipper (Greek-registry 28,479-dwt) collided about midnight arnois Locks in the St. Lawrence Seaway. Aboard the Canadian Explorer, two vents, two lights & the gangway were destroyed and several ribs were bent. The Island Skipper, following the collision, hit the bullnose of a dock and suffered damage that included holing to its No. 2 cargo hold.
9.] 16 Dec. M/V Gonave Express (Belize) sank 55 miles southeast of Miami, in a storm. A U.S. Coast Guard helicopter rescued the crew in 10-foot seas. The ship broadcast a distress call at 0200 after it lost propulsion and began to flood;
10.] 16 Dec. A fire aboard M/V Slanic (Romanian-cargo ship.) in a floating dock at Constanta, Romania, has destroyed most of its superstructure. Damage its estimated to be at least US$500,000;
11.] 16 Dec. Eight vessels are sunk or aground in Apra Harbor, Guam, following Super Typhoon Paka;
12.] 17 Dec. M/T Orange Star (Norwegian-registry 18,302-gt) ran aground near the Yenikoy area of Istanbul, Turkey. The Bosporus Strait was closed to allow for refloating;
13.] 19 Dec. M/V Venice (Honduran-wooden freighter) caught fire at an anchorage in Port Everglades, Fla. The Florida Marine Patrol rescued all 6 crew. The Venice drifted and came ashore, where the fire was extinguished by personnel and equipment from U.S. Coast Guard Station Fort Lauderdale;
14.] 20 Dec. M/V S. Ugurlu (Turkish-general cargo), sank sailing from Thessaloniki, Greece, to Venice, Italy, when it ran aground and sank off Kimi, Greece. Eleven of the 12 crew were rescued;
15.] 20 Dec. M/V Kukawa (British containership.) caught fire in the English Channel. The fire began in the engine room but spread. Ten of 33 crew were taken by helicopter to M/V Triton Diamond (Panamanian) but the remainder stayed aboard to fight the fire with 26 British & 2 French firefighters;
16.] 20 Dec. M/V Anjana (Bahamian-registry) is believed sunk south of Norway after the ship began flooding and took on a heavy list. The crew of 12 was rescued by air;
17.] 20 Dec. M/V Lass Sun (German) sank after colliding with M/V Valentin Pikul (Ru Skagerrak Strait between Denmark & Norway. The Lass Sun's master was killed while its 5 other crew were rescued by the Valentin Pikulye;
18.] 21 Dec. M/V MSC Rita (Mediterranean Shipping Co.) arrived in Boston with damage to 4 cargo hatches & 4 hazardous materials incidents due to cargo damage. One hatch aft of the superstructure reportedly toppled onto the deck. About 60 containers were lost overboard;
19.] 23 Dec. M/V Lotus Islands (Panamanian-registry 15,175-dwt dry cargo) broadcast a distress call that said the ship was sinking in the Pacific Ocean. Three vessels were at last report sailing to the area to begin a search;
20.] 1 Jan. M/T Lancer (Bahamian-23,093-dwt chemical tanker) had an explosion aboard shortly after departing Campana, Argentina. The crew abandoned the ship but 2 were killed and 6 are missing;
21.] 1 Jan. M/V Oak (Bahamian) was reported listing & adrift with 13 people aboard, as a Beaufort Force 10 storm approached. The Oak has stabilized with a 6-degree list;
22.] 4 Jan. 17 crew of M/V Amanah were rescued by helicopters after the ship ran aground off Keelung, Taiwan; .] 8 Jan. M/V Filomena Lembo (Italian) had an engine room fire in the Black Sea. It has been extinguished but damage is unknown;
23.] 4 Jan. Two containerships have received damage after they collided at Felixstowe, UK. M/V Newark Bay (U.S.-registry 59,810-dwt, Sea-Land Service) hit the M/V MSC Insa (Mediterranean Shipping) after bad weather parted tow lines to the Newark Bay as it was berthing. The MSC Insa, already at a berth, was pushed into a mud bank. No containers were OUTWARDLY damaged.

........... due to severe weather, there were many more collisions, groundings & incidents too numerous to report here in The Cargo Letter.

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.

OUR "D" Section: FF in Cyberspace

8. 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 ...............

OUR "E" Section: The Forwarder/Broker World

9. New Argentine Pre-Shipment Inspection Regs.

-- by Eduardo M. Pereyra of AirSeaLand Int'l Forwarders

Buenos Aires -- As of 29 Nov. 1997, there is a new customs regulation for all consumable goods imported to the Argentine Republic, where total F.O.B. value exceeds US$3,000. This new regulation is known as the "Pre- shipment Inspection Program for the Import of Consumable Goods". The rule is compulsory for all the goods generally destined to be consumed, as specified in "Annex V of Resolution 396/97" (foreign trade nomenclature of the goods involved) of Argentine Customs authorities (D.N.A.-Direccion Nacional de Aduanas).

The new regulation demands importers and/or their custom brokers provide notice 15 days before the inspection day (which must be 5 days before the sailing called "S.I.P." (Solicitud de Inspeccion Pre- embarque/Pre-shipment Inspection Request) with one of the companies authorized by the Argentine Customs Service to conduct inspections. A list of authorized companies is included below.

Contents of the S.I.P. : The Seller's Info: name/company, address, city, country, person in charge, phone, fax, email; The Supplier's Info: same information as for the seller; The Importer's Info: same information as for the others along with additional status & intended use info.

The S.I.P. must explain if the shipment is LCL or FCL, if it contains used items, country of origin, mode of transport, destination customs, ETD, in-transit time, entrance customs, country & place of origin/shipment, last place of shipment, foreign trade nomenclature by item, description of the goods as per commercial documents (brand, model and/or version), quantity, selling units & unit price, currency in which calculations are made, F.O.B. value, freight cost, C.F.R. value, insurance cost, C.I.F. value, statement of any commercial and/or financial liaison between importer & exporter, statement of any commissions due/paid on the goods and its amount (if any), statement of any discount on the sale and its amount (if any), statement of any royalties/copyrights and the amount (if any), statement of any free assistance granted from the seller and the amount (if any), statement of purchasing terms to be marked between F.O.B., C.F.R, C.I.F., other. The purchase document (proforma invoice / letter of credit - contract - other - etc.) must be attached.

The list of authorized pre-shipment inspection companies : - SGS Societe Generale de Surveillance S.A. - Bureau Veritas (Registre International de Classification de Navires et d'saronefs) (available at Los Angeles) - Intertek Testing Services. - Inspectorate Plc. - Socotec International Inspection S.A. - U.T.E.C.U. Holding (C.H.U.) B.V. / Surveyseed Services S.A..

Absolutely none of the included goods may be shipped without the ility of making it into the Argentine Republic, except for a duly written notice stating that the inspection was not performed by the company selected to make the inspection.

Surely, the inspection of goods to be shipped in FCL/FCL containers will be made at the consolidation warehouse at the request of the importer and/or it's forwarder/broker. For consolidated cargo (LCL/LCL) we think arrangements for inspection should be offered as an additional service, with inspection at the forwarders warehouse, arranging with the selected company (as per the "S.I.P." form presented). Be careful to arrange a proper date & time of inspection.

Please do not hesitate to contact AirSeaLand S.A. Int'l Freight Forwarders of Buenos Aires if you need any additional information. The company will be happy to check any particular foreign trade nomenclature number, or to verify if it is included in the new regulation. AirSeaLand S.A. Int'l Freight Forwarders Perz 367 2: (1067) Buenos Aires, Argentina Tel: (54-1) 342-0123 /334-0606 Fax: (54-1) 331-1052 E-Mail: airsland@mbox.servicenet.com.ar

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