The Cargo Letter

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Air & Ocean Freight Forwarder - Customs Broker News
30 November 1998

Good Monday 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''. BREAKING NEWS as FedEx & Nippon Express unite. See the story in our 1st section. ......and we've got Pirate news!

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 web site ..........

To post comments or discuss articles, go to .......

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

INDEX to The Cargo Letter:

OUR Top Stories
   1. FedEx Takes Japanese Partner
      * Breaking News
      * New Orleans!
      * From IATA & The Journal Of Commerce
      * Can Your Company Afford Not to Attend?
      * January 17-19, 1999
OUR "A" Section: Trade, Financial & Inland News
   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
OUR "D" Section: FF in Cyberspace
   7. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
   8. Montreal Protocol 4 Ratification
      * A Look To The Future of Int'l Air Cargo
   9. New U.S. Transport Related Legal Cases
  10. Captain, Oh My Captain! 
      * What's In A Crowley Name?
      * Who's On Fisrt?
  11. Killings Continue In Indonesia
      * Government In Crisis, People In Fear
      * A Warren Levine Editorial

OUR Top Stories:

1. FedEx Takes Japanese Partner

The Associated Press reported from Tokyo yesterday that Japan's Nippon Express & FedEx have agreed to form a broad alliance in international delivery services. Cooperation will begin in December when Nippon Express, Japan's largest delivery company, starts using FedEx's international delivery service, the Nihon Keizai newspaper said. The alliance is expected to include joint use of parcel collection points & other facilities around the world. FedEx, the 2nd largest transport company in the U.S. & Nippon Express also will share information systems to track cargo deliveries, the paper said. FedEx, which has its own network in Tokyo, Osaka & other major Japanese cities, will contract out work to Nippon Express in areas not covered by its network. The 2 companies hope to save money through increased efficiency at a time when businesses worldwide are reviewing their logistic systems. The deal is expected to be finalized by the end of Dec. Nippon aims to more than triple overseas deliveries to 70,000 a month by Year 2000, boosting annual revenue by several million dollars. The two firms rank among the world's top five transport companies, and their alliance is likely to affect the strategies of United Parcel Service of America Inc. & other competitors.


The third annual event sponsored by The Journal of Commerce and the Int'l Air Transportation Association will once again gather air cargo professionals from all over the globe to discuss how the most powerful information tool on the planet can be harnessed to improve every aspect of your business. Last month's U.S. ratification of Montreal Protocol IV has opened the door for electronic air waybills. Customs can now be cleared with the click of a mouse. Hundreds of your competitors will gain a technical edge by coming to this conference.

As an extra bonus, this year's event has been set by organizer Michal Douglas at New Orleans famous Royal Sonesta Hotel from January 17-19, 1999. The conference will soon be sold out. The available spaces can be arranged through the web sites below. Make your reservation NOW!

Can your company really afford *not* to attend?

Featured Speakers From The Industry's Front Line :
Gail Blauer - V.P. Freight Marketing, Unisys Corporation
Alan Boehme, Director of Planning, DHL Worldwide Express
Guenter Rohrmann, President & CEO, AEI
Neil McCulloch, Manager of Dangerous Goods/Technical, IATA
Don Holt, Editor, Journal of Commerce
Vince Ryan, Mgr. of Global Distribution British Airways World Cargo
Chad Quinn, Sr. Business Mgr. for Transportation, Manugistics
Richard Yost, Symbol Technologies
Kurt Helwig, Pres., Electronic Fund Transfer Assn.
Michael S. McDaniel, Esq., Countryman & McDaniel
Cameron Roberts, Esq., Countryman & McDaniel
Bill Lindsey, Sr. Technical Specialist, BAX Global
Fred Luessen, Airfreight Automation Consultant
Bob Foley, Pres., Export2000 - AES/AMS Internet Gateway
Larry Mays, Program Director: Freight Management Solutions, Unisys
Dave Malone, Business Development Mgr., Cybercash
Browning Rockwell, Pres., TradeCompass
Michal Douglas - MTA-IC: The Usenet Air Cargo Newsgroup
Jim Powell, Pres., Transportation Development Group
Mike Casey, Pres., Deployment Resource Group
Brian Hermelin, Pres., Active Aero Group
Paul Page, Editor, Air Cargo World
Rowena Ahern, VP Business Development, ITM Ship

For Registration:
For Lodging:
Schedule of Events

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

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. Freight Forwarder World Ocean Briefs

OUR "D" Section: FF in Cyberspace

7. 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 ...............

Countering The Anthrax Threat ......... from the U.S. Air Force.

ISO ........ Int'l Organization For Standardization. .......... services & directories.

Crowley Maritime .............. it's past & future in a special Forbes Magazine Article.

Sea Companion World Index ......... great links! Providing information on marine organizations & companies, and their products & services. A GREAT new service!

UPS Document Exchange ....... the new service which is an alternative to moving paper documents.

Virtual Transport Community of Spain

ProNetLink ........... import - export & trade resources. Take a free tour.

Asia Computer Market Update ............. a free bi-weekly newsletter delivered via e-mail & the Internet to over 90,000 readers world wide. To receive a free subscription, direct requests to Archives of all past issues can be found on the Web.

Internet Guide To Freighter Travel

Flight Masters

1999 World Maritime Directory .......... for sale, a new CD. Over 600 pages packed With details on over 14,000 maritime companies.

Maritime Week ......... get a brief, 3 week free subscription

Transport R. Pynnonen Ltd. .......... custodial road transportation to Russia & beyond, since 1948.

MetCrawler .......... the new search engine craze

Audio Highway......... listen to music, news and even books on your PC for free.

Free Electronic Greeting Cards For The Holidays ........... save a tree!

TVGrid.Com ........ customize your own personal, electronic television viewing directory

OUR "E" Section: The Forwarder/Broker World

8. Montreal Protocol 4 Ratification

-- by Michael S. McDaniel & Cameron Roberts, Esq. for The Cargo Letter

LAX -- 29 Nov - As reported in The Cargo Letter [333], the Montreal Protocol 4 (MP4) to the Warsaw Convention was ratified by the U.S. Senate on September 29, 1998 (Congressional Record pages S11059). MP4 will significantly change the existing Warsaw Convention, as adopted the U.S. in 1929. Some aspects of MP4 are certain, like the need for forwarders &indirect air carriers to start looking up the current value of Special Drawing Rights (SDR) to determine their limits on liability for cargo loss, delay or damage.

Other issues are not so clear. While lawyers & courts will attempt to "interpret" MP4, their ability to do so will be limited by the strict construction and plain language approach utilized by Supreme Court Justice Scalia in writing his decision for the case of Chan vs. Korean Air Lines, Ltd., 490 U.S. 122, 134 (1989). There are exceptions to this approach, such as ambiguity, but at what point does traditional judicial interpretation end? According to the U.S. Court of Appeal for the 2nd Circuit in "Tai Ping", (a recent Warsaw Convention case), traditional judicial interpretation ends when "the language is reasonably susceptible of only one interpretation." Likewise, in the Victoria Sales Corp. case , the Court determined that "when the text of a treaty is clear, a court shall not, through interpretation, alter or amend the treaty." In short, unless MP4 is held to be unclear or ambiguous, the Court's would no doubt interpret it using traditional methods of interpretation. However, this process may lead to greater uncertainty. Today, without the benefit of judicial opinions, this article seeks to give the indirect air carrier/forwarder a look into the future according to MP4.

New Article 5 of MP4 replaces language requiring that the consignor "make out" and "hand over" an air waybill with the requirement that an "air waybill shall be delivered" or that "any other means which would preserve a record of the carriage to be performed may, with the consent of the consignor, be substituted for the delivery of an air waybill." It is this change that clears the way for the use of electronic air waybills. Before MP4 it was clearly established that air carriers were required to issue a "paper" air waybill. It is estimated that a "paper" air waybill costs the air carrier an additional US$6 to US$7 per shipment to process. This savings will no doubt be realized by carriers in the best position to create a seamless electronic cargo environment, such as integrators and global forwarders. Moreover, it will allow air carriers to fully participate in electronic networks, such as Bolero, and facilitate the move to a completely paperless transportation environment. Nevertheless, smaller forwarders and shippers will still continue to use "paper" for the foreseeable future.

New Articles 6 & 7 of MP4 retains the language requiring that the air waybill be "handed over" and "signed." These formalities will continue to complicate "paper" shipments and may further complicate the formalities required to "preserve a record of the carriage" in accordance with New Article 5.

New Articles 8 & 9 of MP4 replaces language requiring that "the air waybill shall contain the following particulars" or the carrier loses the ability to limit his/her liability. Prior to MP4, Article 8 & 9 required that stopping places for the flight be stated. This resulted in significant damage awards in favor of shippers, as in the Tai Ping and Brink’s cases. However, under MP4, the air waybill needs only to have "an indication of the places of departure and destination and an indication of the weight of the consignment" Under MP4, noncompliance with the provisions of Articles 5 to 8 does not appear to result in a loss of liability limits.

New Article 10 of MP4 gives greater protection to the carrier, expanding consignor liability to include indemnification of the carrier if the particulars provided by the shipper/consignor or on his behalf are the cause of damage.

New Article 13 (No Change) of MP4 continues to complicate, if not prohibit, carrier liens on prior shipments against cargo in possession of the carrier, which are permitted in all other modes of transportation.

New Article 18 of MP4 expressly adopts the traditional exceptions to carrier liability: "(a) inherent defect, quality or vice of that cargo; (b) defective packing of that cargo performed by a person other than the carrier or his servants or agents; (c) an act of war or an armed conflict; (d) an act of public authority carried out in connection with the entry, exit or transit of the cargo." MP4 also expands and clarifies the damage presumption stating that if "for the purpose of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air."

New Article 22 of MP4 Changes the old damage limit of US$20.00 per kilo or US$9.07 per lb. to 17 Special Drawing Rights (SDR) a unit of currency determined by the International Monetary Fund. The new cargo liability limit will fluctuate with currency valuations and is about US$23.15 per kilo or US$10.50 per lb. Refer to for the current SDR exchange rate.

New Article 25 of MP4 deletes the vagaries of a "willful misconduct," but allows a shipper to recover beyond the limits of liability if the shipper can prove that "the damage resulted from an act or omission of the carrier, his servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result; provided … that the servant or agent … was acting within the scope of his employment."

Despite a historic revision of many of Warsaw’s central points, the primary focus is clearly on Article 5 and the ability of air carriers to use electronic air waybills. All electronic air waybill systems are not created equal and MP4 offers little or no guidance concerning standards. The Bolero Project and the current ocean debate on electronic tariff filing with the U.S. Federal Maritime Commission may offer guidance, but in this rapidly changing world how much system redundancy is required to insure the same level of reliability, authenticity and credibility as a paper air waybill?

Read the entire Warsaw Convention and the Montreal Protocol 4 at The Cargo Letter's "Law Navigator" feature:

9. New U.S. Transport Related Legal Cases

Wright v. Universal Maritime Service Corp. - U. S. Supreme Court

No. 97-889

The United States Supreme Court unanimously vacated and remanded the Fourth Circuit's holding that the general arbitration clause in the collective bargaining agreement (CBA) requires Wright to use arbitration for an alleged violation of the American With Disabilities Act of 1990 (ADA), 104 Stat. 327, 42 USC s12101 et seq. The Supreme Court reasoned that in order to disallow an ADA claim, an arbitration clause in a CBA must clearly and unmistakably state that such claims are subject to arbitration. Wright, a longshoreman, was subject to a CBA and Longshore Senority Plan which contained a waiver of a federal judicial forum for statutory claims of discrimination. The Court held that the waiver was not clear and unmistakable because the Plan does not contain an anti discrimination provision and it specifically limits its grievance procedure to disputes related to the agreement. For full text:

Cigna Property & Casualty. INS. Co. v. Polaris Pictures Corp. - 9th Circuit Court of Appeal

Nos. 96-56252, 96-56789
Decided Oct. 22, 1998

Holding: The pleadings and uncontroverted evidence at trial support a judgment of rescission of the marine insurance contract on the ground of failure to disclose material facts in the insurance application. Polaris &U.S. Inbanco Ltd. appealed from the district court's judgment granting Cigna Property and Casualty Insurance rescission of a marine insurance contract on a yacht based on the ground of fraud. The district court found Polaris &Inbanco had purchased the insurance from Cigna with the intent to sink the yacht. The 9th Circuit affirmed the district court's rescission judgment albeit on different grounds. AFFIRMED. For full text: bin/

El Al Israel Airlines v. Tseng - U. S. Supreme Court

No. 97-475
Status: Pending
Court below: U. S. Court of Appeals, 2nd Circuit

At issue in this aviation law case is whether the Warsaw Convention provides an exclusive remedy for a passenger's injuries involving Int'l transportation if the injuries were not sustained by an "accident" within the meaning of Article 17 of the Convention. On May 22, 1993, respondent Tseng attempted to board her flight to Tel Aviv. After questioning Tseng, El Al Airlines security determined her to be a high-risk passenger. Security took her to a private room where she underwent an intrusive search. An hour later, security determined that Tseng did not pose a risk to the airline. Upon returning to the US, Tseng filed suit in state court for personal and property damages resulting from the search. The court below held that the security search of Tseng was not an "accident" within the meaning of Article 17 but that the Warsaw Convention does not preclude other sources of recovery for a passenger's bodily injuries sustained in the course of international air travel.

10. Captain, Oh My Captain

-- by Michael S. McDaniel for The Cargo Letter

Port tug: "Captain, emergency turn to starboard, over!"
Docking Vessel: "This is Capt. Smith, roger."
Port tug: "Negative, instruction is for the tug Captain."
Starboard tug: "This is the Captain of the tug "San Pedro", roger."
Port tug: "Negative, negative, instruction is for the captain of the tug 'Captain'!"
Tug "Captain" : "This is the tug "Captain", our captain is off the bridge, over."
[loud noises are heard]

Crowley Marine Services’ brand new Los Angeles-Long Beach tractor tug “Captain” has just been renamed “Admiral”. The previous name caused communication problems between ship captains, pilots & tug captains when the tug was engaged in its work. There are a lot of captains in that group, but the new tug "Admiral" now outranks them all!

11. Killings Continue In Indonesia:

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

SEATTLE - 29 Nov. -- The steamy streets of Jakarta, crowded with protesters and stained with the blood of murdered students and ethnics, continue to be the flash point of political and secular violence in the Asian world.

Christian churches and Buddhist temples continue to be burned and bombed. 90% of the nation's Christians are ethnic Chinese, who continue to be the targets of violence. Last week a Roman Catholic school & a number of Christian churches were bombed or set on fire by Muslim mobs. "They hit me with their fists and a piece of wood as I ran out. They had knives, but I ran down a street (and escaped)," Pastor Johannes Linandi told the Associated Press. His Protestant church was burned down between Sunday services, the pastor reported, which kept the death toll down in that particular attack. There are few things to be thankful for in Indonesia in these troubled days.

Security forces have cordoned off former President Suharto's Jakarta residence, as student protesters have attempted numerous times to breach the perimeter of the compound, although Suharto resigned "to spare the country further bloodshed" after the spring riots in which Chinese ethnics and Christian clerics and citizens were raped and killed.

Protesting forces have been calling as well for the ouster of President B.J. Habibie, under whose leadership the violence has increased and, in fact, spread to Islamic clerics. Indonesia, the most populous Islamic country, has in the past been known as a fairly tolerant, though not prosperous, melting pot for Christians, Buddhists and Muslims.

The separatism of Chinese ethnics began during Dutch colonial rule, and although the groups were physically separated by neighborhood boundaries, their coexistence was peaceful except for a period in 1965 when a Communist coup attempt was put down. Chinese have always been considered a target during times of unrest in Indonesia.

General Wiranto, chief of Indonesia's armed forces, has warned that the violence is expected to continue through the middle of next year, when the next parliamentary elections are scheduled.

A reported seventeen people were killed recently by troops firing rubber bullets into crowds of protesters in the Semanggi section of Jakarta. Independent news reports filtering out of Indonesia put the death tolls at multiples of the official number.

In the latest series of protests, at least nine buildings were burned to the ground as troops took control of Pinrang, on Sulawesi, some 900 miles northeast of Jakarta. "Roads to Pinrang have also been blocked by troops for security reasons," one policeman reported to Reuters last night.

Protests & riots in Pinrang were caused by the government's detention and imprisonment of local cooperative managers who protested the government's refusal to pay their groups.

Official government sources attempted to defend their position by charging the managers with embezzlement. However, the legitimacy of the government's claims was loudly and soundly questioned when a crowd reported to be in the tens of thousands attempted to storm the prison in an attempt to free the imprisoned managers.

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