The Cargo Letter

header2b.jpg (5742 bytes)

Air & Ocean Freight Forwarder - Customs Broker News
3 February 1999

Good Wed. 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''. We're back from the Air Cargo & Logistics Internet Symposium 3 at New Orleans and slightly late with this edition for you.

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 portal ..........

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

The Freight Detective ........

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

INDEX to The Cargo Letter:

OUR Top Story
   1. Port Of L.A.'s Window On The World
      * Los Angeles Charts Year Ahead
OUR "A" Section: Trade, Financial & Inland News
   2. Freight Forwarder Trade Briefs
   3. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
   4. Freight Forwarder World Air Briefs
OUR "C" Section:  FF World Ocean News
   5. FF World Ocean Briefs
OUR "D" Section: FF in Cyberspace
   6. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
   7. New U.S. Transport Related Legal Cases
   8. Beijing Allows Democratic Election in Small Town;
	An Indicator of Political Change to Come in the PRC?
      * Our Warren Levine Article

OUR Top Story

1. Port Of L.A.'s Window On The World

26 Jan. - LAX -- Port of Los Angeles Exec. Director Larry A. Keller provided a look into the Int'l trade community as it prepares to enter a new century of partnerships at the Port's 3rd annual forum last week. "By all accounts, the Asian financial crisis is still with us, but it has a distinctly different look than one year ago," Keller said. "There have been changes, but the overall situation appears to be stabilizing. In general, projections about the rate & extent of recovery for Asia vary. Consensus, however, appears to be that we will see complete recovery in 2 to 5 years. Thankfully, in some cases, the effects are beginning to flatten now." "This year will be pivotal as businesses around the world position themselves to take advantage of the opportunities of a recovering world economy.

During his presentation, Keller provided insights into the effects of the Asian financial crisis around the globe, including:

Korea -- "It appears that recovery is coming to those nations hit first -- Thailand & Korea among them. Korea, in particular, is seen by some economists as a success story for open and deregulated economic reform. In general, the Korean economy is showing clear signs of recovery in key economic data. "For the past two months, foreign exchange reserves have swelled to pre- crisis levels. That's good news to companies such as raw materials exporters for whom Korea was a major customer," added Keller.

Japan -- "Japan's role in the recovery is key, with that single nation's economy accounting for two-thirds of Asia's economic activity. Last April, the Japanese government announced an economic stimulus package worth 16 trillion Yen, but that package alone is widely viewed as not enough to put the Japanese economy back on track. "If Japan is unsuccessful in its recovery efforts, some experts predict a dire Japanese scenario. That would lead to an economic downturn which would be profoundly felt around the world.

Taiwan -- "Although the domino effect has been felt by Taiwan, that country has continued to drive technical innovation and capture markets. The backbone of the Taiwan economy -- its domestic small and medium-sized manufacturers -- is thriving. The first nine months of 1998 actually saw a decrease of more than 10% in the two-way trade between Taiwan and the U.S. This is unprecedented," Keller added.

Hong Kong -- "What has been described as the worst economic recession in 36 years is forcing Hong Kong to abandon its so-called 'high-roller, casino- style' economy and establish itself as a truly cosmopolitan city of China. In fact, some economists go still further and foresee Hong Kong's future role as servicing China's economy. "The image as a transient colony is gone. Hong Kong, in response, is developing its high-tech industry, but is behind Taiwan and Singapore at this point," Keller continued.

Vietnam -- "Southeast Asian nations anticipate slow recovery. Some countries, like Vietnam, have found new avenues for recovery. For example, despite floods and drought, grain production is up. Rice is now that country's largest growing export, up 7% in quantity and more than 18% in value. "The economic upswing has been somewhat slowed by socio-economic difficulties, but Vietnam is certainly an example of recovery despite natural disasters and other negative influences," Keller said.

South America -- "Brazil has been most severely impacted, while Argentina and Chile have so far ridden out the storm in better shape. If, as some predict, further financial 'combustion' occurs in Brazil, it could negatively affect its trading partners like Argentina and Mexico. "But Brazil's situation would not be expected to have the devastating worldwide domino effect of the Asian financial crisis of 18 months ago. South America is a very different situation with much privatization of trade policies and financing," said Keller.

Europe -- "We are now seeing the beginnings of a new order in global financial markets, with the launch of the Euro and the integration of Europe into a single economy. This should not be underestimated in the face of the Asian crisis. The potential benefits of the Euro are great: low inflation, balanced budgets and price stability, plus price transparency which should lead to greater competitiveness for European goods on world markets."

Southern California -- "Here in Southern California, the signs are good. Home sales are up. Unemployment is down. The Port of Los Angeles is recording huge increases in inbound cargo as our Asian partners seek to recover through manufacturing and exporting to take advantage of the strength of the dollar. Our exports are down as the same partners show significant decreases in their domestic buying power," added Keller.

For the full text of Larry Keller's presentation, visit the Port's Web site & click on "press releases."

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

2. Freight Forwarder Trade Briefs

3. The Cargo Letter Financial Page

OUR "B" Section: FF World Air News

4. Freight Forwarder World Air Briefs

OUR "C" Section: FF World Ocean News

5. Freight Forwarder World Ocean Briefs

OUR "D" Section: FF in Cyberspace

6. 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 ...............

World Ocean Shipping Schedules

Cargo Container Loss Prevention Devices .......... from CGM, includes use of GPS technology. A wide array of tamper evident devices specifically designed for cargo. These products identify pilferage before custody changes hands. They act as a visual template for inspection while offering deterrent value in a way that no other loss prevention products do.

Global Trak ........ satellite tracking devices. MobilTrak to track on a real time basis & access remote computerized data from reefers.

Roadway Express .......... opens new desktop tracking & e-commerce system. .......... new Web-based shipping service for e-commerce buyers &sellers, offers a complete e-commerce shipping solution, including multi- carrier rate and service comparisons & integrated shipping and tracking capabilities, at the convenience of one Web site.

McHugh Software ............. as Sea-Land has gone live with its "TRACS", McHugh's transportation management system

Royal FloMex Line ......... the latest Ro/Ro service between Tampa Bay, Florida to Puerto Morelos & Port of Progreso, Mexico

Customs Broker Exam Prep Course ......... New York, March 1999. Double your chances!

FLOW ........ the company will supply all your needs for shipping bulk water, if you have such needs.

World Sourcing Ltd., LLC ........product sourcing, international trading, logistics & distribution, promotional items, all types of general merchandise.

OUR "E" Section: The Forwarder/Broker World

7. New U.S. Transport Related Legal Cases

Argued Before the United States Supreme Court in Jan. 1999
United States Vs. Haggar Apparel Company
No. 97-2044
Court below: United States Court of Appeals, Federal Circuit

The issue in this tariff law case is whether regulations issued by the Treasury Department under the Tariff Act are entitled to deference in determining the proper tariff classification for imported goods and, specifically, whether 19 CFR s 10.16(c) reasonably interprets the statutory phrase "operations incidental to the assembly process" in Subheading 9802.80 of the Harmonized Tariff Schedule of the United States to exclude the "permapressing" of items of clothing assembled abroad. Facts: Haggar brought suit to recover customs duties paid under protest in 1988 and 1989 resulting from the "permapressing" (a process of chemically treating and pressing garments to make them "wrinkle-free") of its garments in Mexico. The Treasury Department specifically excludes duty allowances for "permapressing" because of the chemical treating process. The court below denied deference to Treasury Dept. regulations and held Haggar's process to be incidental to the entire assembly process, and therefore Haggar is entitled to a duty allowance. Decision pending.

Decided by the United States Supreme Court in Jan. 1999
El Al Israel Airlines Vs. Tseng
No. 97-475

The U.S. Supreme Court reversed the 2nd Circuit Court of Appeals (8-1, opinion by Ginsburg; dissent by Stevens) and held that the Warsaw Convention precludes an airline passenger from maintaining an action for personal injury damages under local law when her claim does not satisfy the conditions for liability under the Convention. Tseng, an El Al passenger, was subjected to an intrusive security search in New York before boarding a plane. The Warsaw Convention (Article 17) awards damages to a victim of an "accident" in international air traffic. The Court reasoned that since Tseng suffered no bodily injury, she was not covered under Article 17 and that recourse to local law would undermine the uniform regulation of air carrier liability that the Convention was designed to foster. Full text:

Decided by the 9th Circuit Court of Appeal in Jan. 1999
U.S. Customs
United States Vs. $273,969.04 U.S. Currency
No. 95-55882

Holding: The 9th Circuit held that the civil forfeiture of $273,969.04 in currency & US$117,550 in jewelry under 31 U.S.C. sec. 5317 was not punitive for the purposes of the Double Jeopardy Clause; that the forfeiture of the jewelry did not violate the Excessive Fines Clause; and that the record was not sufficiently developed to determine whether the forfeiture of the currency was excessive.

FACTS: Ms. Puzo failed to disclose to U.S. Customs that she was carrying US$273,969.04 in currency & four pieces of jewelry valued at US$117,550.00. Puzo plead guilty to 18 U.S.C. sec. 1001 and was sentenced. The U.S. brought this civil forfeiture action in rem against the currency under 31 U.S.C. sec. 5317. Puzo appealed summary judgment in favor of the U.S. arguing that the forfeiture violated the Double Jeopardy Clause and the Excessive Fine Clause. AFFIRMED IN PART; VACATED AND REMANDED IN PART. Full text: bin/

Of The Ten Biggest U.S. Jury Verdicts I 1998:

Jury Verdict No. 9.] US$81M against UPS for sex discrimination against a female supervisor in Iowa (Channon v. United Parcel Service Inc., U.S.D.C. (D. Iowa) Feb. 12). For details of all the Top Ten:

8. Beijing Allows Democratic Election in Small Town An Indicator of Political Change to Come in the PRC?

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

SEATTLE, Jan 28, 1999 -- A small town in Sichuan Province became the first known political subdivision in The People's Republic of China to hold free democratic elections when they elected Tan Xiaoqu, a member of the Communist Party, the leader of their local government. Tan received just over 50 percent of the votes in a four-candidate election.

Buyun, a town of about 16,000 people, 950 miles southwest of Beijing, is a collection of smaller villages, a remnant of the old collective system whose legacy continues along current political lines, except for this latest election. Over 6000 people cast votes in the election in this remote town, which received the hushed approval of the county-level government, and drew some unexpected poll-watchers from Beijing.

One farmer was quoted as saying, "Open democracy is better, of course. We need a leader with the spirit to really get things done. The taxes on each pig, and on other crops, make it almost impossible to make a living."

Tan Xiaoqu, the winner of the election, praised the process, saying, "What the people wanted was to select their own officials. If it turns out they can't manage things, only the masses can decide."

Most curious is that China's permission was given to Buyun to hold democratic elections at the same time dissidents are being cracked down upon and are in the news on an almost daily basis.

On the same day one newspaper criticized the free election as being illegal, the more change-oriented officials of the Central Committee of the Communist Party said that it was legal, because of a 1997 speech given by President Jiang Zemin in which he called for "electoral experiments."

[an error occurred while processing this directive]