The Cargo Letter

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Air & Ocean Freight Forwarder - Customs Broker News
12 April 1999

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''. And yes, we have 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 .......

The Freight Detective ........

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

INDEX to The Cargo Letter:

OUR "A" Section: Trade, Financial & Inland News
   1. Freight Forwarder Trade Briefs
   2. The Cargo Letter Financial Page
OUR "B" Section: FF World Air News
   3. Freight Forwarder World Air Briefs
OUR "C" Section:  FF World Ocean News
   4. FF World Ocean Briefs
OUR "D" Section: FF in Cyberspace
   5. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
   6. Zhu, Clinton Discuss Trade, Politics 
         But Clinton Vetoes WTO Bid
   7. New U.S. Transport Related Legal Cases
   8. Y2K - Where We Are
      * Panic Now, Not later
   9. "S.O.S." - You've Been Misinformed
      * Nothing's In A Word

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

1. Freight Forwarder Trade Briefs

2. The Cargo Letter Financial Page

OUR "B" Section: FF World Air News

3. Freight Forwarder World Air Briefs

OUR "C" Section: FF World Ocean News

4. Freight Forwarder World Ocean Briefs

OUR "D" Section: FF in Cyberspace

5. 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 ...............

Y2K Compliance Database

Hertz Corp. ............ fully interactive website for it's Truck & Van business. The site calculates the total cubic feet & determines the truck size needed. Also included is the full range of moving-related supplies & equipment available such as boxes, tape, rope, furniture pads, and hand trucks. Users can search for specific rental locations in their area &receive turn-by-turn directions to that location.

Yellow Freight .......... new site, services & a feature to customize your own personal page and obtain "daily specials".

Women In Aviation

Norfolk Southern Corp. ...........1998 Annual Report.

Go-Global ........ has a new screen saver for you

BEA Weblogic ........... software tracking just adopted by APL.

The Registry of Former Federal Investigators .........including U.S. Customs

Toxic Chemicals On CD-Rom ..........SARA III fields integrated with TSCA information; select U.S. Code Chapters; CORR with TSCA 4, 5, 6, 8, and 12b (export) cross-references; EPA PMN; Canadian DSL/NDSL; European ELINCS; & Adobe, Acrobat (PDF) format for instant search/retrieval.

Emergency Equipment & Info

Fraud Report ....... how stop it, not do it.

Visions of LAX .......? We're not exactly sure what this, but offer thanks from our home, LAX.

It's Tax Time ........ better consult the Freight Detective's Financial Center
Financial Resources - The Cargo Letter

OUR "E" Section: The Forwarder/Broker World

6. Zhu, Clinton Discuss Trade, Politics But Clinton Vetoes WTO Bid

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

SEATTLE (April 11) -- President Clinton and Chinese Premier Zhu Rongji met last week in Washington, DC, to discuss trade issues. The talks were thought to be an icebreaker for China's entry into the World Trade Organization.

But after days of negotiations and some concessions on the part of the Chinese, Zhu will return to Beijing without the coveted brass ring of WTO membership.

Far from sending Zhu home empty-handed, U.S. Treasury Secretary Robert Rubin said, "...we've made a great deal of progress, and ... (Zhu) had a very successful trip in moving this process forward a very long way."

During the meetings, China agreed to lift its ban on importations of Northwest wheat, and lowered tariffs on thousands of American products. China also pledged to lift its bans on US telecommunications companies, which will improve communications within China and provide a huge market for American companies at the same time.

Duties levied by China on consumer goods are prohibitive -- blue jeans, for example, carry a 70% duty -- and most Chinese companies cannot afford to incur such expenses. Similar high duties on durables have slowed the modernization of China and made items which are considered necessities in the West inaccessible to all but the wealthiest Chinese.

The easing of regulations on American telecommunications companies should have a positive long-term effect on China's infrastructure, as only a reported 10 percent of Chinese households now have a telephone. This opens up a huge, hungry market for companies such as Lucent Technologies (NYSE: LU), AT&T (NYSE: T), and other companies which already have a joint-venture presence in China.

Although China made what Zhu called "very, very major concessions," President Clinton vetoed China's entry into the WTO. The bottom line for the United States continues to be the reduction of the $57 billion trade deficit with China.

Last Friday, Taiwan announced that it would rescind an import ban on Chinese produce, but the ban on direct flights and sailings between Taiwan and the mainland will continue to be in effect.

Taiwanese were incensed when Zhu, during his visit to the White House, compared his position to that of President Lincoln, who fought and won a civil war in the United States. The fact that Lincoln was fighting for freedom and human rights escaped Zhu, who still presses for Taiwan's "reunification" with the mainland. Taiwan officials restated their position firmly that they "will never, ever accept the communist system of government" of Beijing.

In addition to the meetings in Washington, Zhu, the first Chinese Premier to visit the United States since the mid-1980s, stopped in Denver on Saturday, where he addressed a group at a luncheon given by the mayor.

Twenty-three pro-Tibet protesters were arrested by Denver police, and Harry Wu addressed the crowd: "The Chinese have come here with blood on their hands."

In a somewhat unrelated story, Zhu Muzhi, a former Chinese Communist Party official, told AP reporters in Beijing that China had a shortage of tear gas and rubber bullets and were forced to use the only weapons they had -- guns with live ammunition -- to repel protesting students in Tiananmen Square in 1989.

The tenth anniversary of the democracy uprising is June 4th, and protesters are already massing to deluge China with petitions and information. A website has been set up at

Zhu is due to visit Los Angeles, Chicago, New York and Boston before returning to Beijing.

Warren Levine -

7. New U.S. Transport Related Legal Cases

Warn v. M/Y Maridome
Nos. 97-55610, 97-56355
Decided March 3, 1999

Holding: The U.S. 9th Circuit Court of Appeal held the district court's dismissal of Warn's Jones Act claims as proper in the face of relevant Lauritzen factors pointing toward the application of foreign maritime law.

Facts: The luxury yacht M/V Maridome hit a metal pipe in a Greek harbor while ferrying crew & passengers to shore. The accident resulted in multiple injuries and deaths. When the Maridome was in U.S. port, the Warn's filed suit for claims under the Jones Act, the Death on the High Seas Act, & general U.S. maritime law. The 9th Circuit approached the dismissal of Warn's claims using the analysis in Lauritzen v. Larsen, 345 U.S. 571 (1953).

They held the dismissal of the Jones Act claim as proper when considering the Lauritzen factors. While the ship may have been managed from a U.S. base of operations, the 9th Circuit found many other factors pointing to the application of foreign law and held the dismissal of other claims for forum non conveniens as appropriate given Warn's available remedies to two different foreign nations. AFFIRMED. Read the entire opinion:

8. Y2K - Where We Are

Business Wire - March 199 -- It's now less than 200 business days until your company will be tested.


"We...must be ready for the 21st century from its very first moment, by solving the so-called Y2K computer problem... We need every state and local government, every business, large and small, to work with us to make sure that this Y2K computer bug will be remembered as the last headache of the 20th century, not the first crisis of the 21st."


"Despite its short tenure, the Committee has logged a staggering number of hours addressing the Y2K issue...The Committee is among the most broad-based, best-informed bodies in existence, yet it cannot predict what will occur on January 1, 2000. The data simply does not exist... While the Committee is growing more comfortable with the level of domestic preparedness, we have far less confidence in the international arena..." (report released March 3)


"... Many observers assume developing countries are less dependent on computers in everyday national life. But the majority of developing countries, even the poorest, have computerized essential services such as power generation, telecommunications, food and fuel distribution, and the provision of medical care. ...A general failure of such systems could endanger the health, security, and economic well-being of people in the developing world." (World Bank press release, Jan. 26) The World Bank conducted a survey on the Y2K preparedness of 139 developing countries. It found that only 54 had initiated national Y2K policies; only 21 were taking concrete remedial steps to safeguard their computing systems; and 33 reported high-to-medium awareness of the problem but were not currently taking action. The Bank warned that the mere existence of a national Y2K action plan should not be taken to imply that countries would be fully Y2K compliant by the end of 1999.

More Recent Y2K Developments

PC Buying Spree? During January's World Economic Forum in Davos, Switzerland, Sun Microsystems CEO Scott McNealy warned there could be a boom in PC purchasing in the latter half of 1999 as companies stockpile against a future shortage. McNealy warned that computer components manufactured in Asia could suffer serious disruptions because of Y2K. Sun & more than 40 other IT manufacturers, including Cisco, Dell, Hewlett-Packard, IBM, Intel, & Motorola, have banded together in a group called the High Tech Consortium-Year 2000 and Beyond to address Y2K issues and conduct tests of their supply chains. (News reports)

Panic Now, Not later: Panic about the Y2K problem could be worse than the problem itself as some warn that Y2K may cause bank runs, food & gasoline hoarding, and social disruptions. Y2K expert Charles Halpern told the New York Times that overreaction now may be preferable to overreaction later. "There's sufficient information for people to say there's a substantial risk of disruption. Overreaction now is so much preferable to overreaction in November that it's a risk worth running. People who want to lay in supplies of canned vegetables can do it now without disrupting anything." (New York Times, Feb. 9, 1999).

Russia Ups Ante: Last August, Defense Minister Igor Sergeyev said the Y2K problem would not affect Russia's Strategic Rocket Forces because "we use special technologies." In December, Strategic Rocket Force Commander Vladimir Yakovlev said fixing the millennium bug would cost his forces less than US$500,000. By February, however, Russia's Y2K coordinator asked for Western help and said Russia needs as much as US$3B for defense systems, nuclear power plants and other networks. (Dallas Morning News, Feb. 15, 1999).

SEC Disclosures Lacking: "Many companies are still not complying" with the Securities & Exchange Commission's Year 2000 disclosure requirements, SEC Chief Accountant Lynn Turner said Feb. 16. Turner said more than half the companies in an unspecified sample failed to disclose how much it is costing them to get their computer systems ready for the millennial change, while close to half didn't describe their contingency plans in case the systems fail. The SEC is alerting investors to examine the Year 2000 disclosures of companies that interest them. If he were the chief financial officer of a corporation that wasn't adequately prepared and things went wrong after Jan. 1, Turner said, "I'd be hung out there like a cold piece of meat in storage." (Associated Press, Feb. 17, 1999)

Utilities, Airlines Increasingly Confident: U.S. electric utilities signaled increased confidence that power will flow as the calendar rolls. The North American Electric Reliability Council (NERC) released its fourth quarter 1998 status report, asserting "virtually all" electric power systems in North America will be "Y2K" ready by June 30, 1999. Meanwhile, commercial airlines in early February began taking reservations for dates beyond January 1, 2000. Many airlines have announced that top executives will be flying during the rollover to January 1, 2000 as a display of confidence in their Y2K preparedness. (News reports).

WHY-2K Contingency Planning? (by Vincent Mullineaux, CEO, Millennia III) After all the time & money organizations have spent to fix or replace noncompliant systems, many senior managers can be forgiven for asking, "Why do I need Y2K contingency plans?" Consider: Incomplete remediation and/or testing: Neither automated nor manual analysis and repair of Y2K-affected systems guarantees 100% success.

Moreover, Y2K remediation is only as good as the test scripts, plans and data that actually exercise the multiple functions of an application. Undiscovered errors or omissions in the testing plan may have catastrophic consequences. Inadequate change management; deficient inventories: IT/IS assets are added, changed, removed from the business environment on a constant and irregular basis. This can result in the introduction of new Y2K error conditions. The most dangerous situations are systems that are not part of the Y2K remediation effort, or hardware/software that has been changed without the knowledge of the Y2K conversion team. Incomplete infrastructure compliance: Suppliers of water, electricity, telephone, building access, etc. may experience Y2K interruptions that could disrupt your business. Noncompliant key suppliers: mission critical business functions could be interrupted by failures at key suppliers, despite your best efforts to survey them for Y2K compliance beforehand. Non-compliant customers: inability to accept delivery of your products, nonpayment, returned merchandise, loss of warehouse space, all could result in disruptions to your business and/or cash flow.

Despite their own best Y2K compliance efforts, every organization must face the reality that things will be missed and some mission critical systems and suppliers will fail. An adequate contingency plan, properly communicated and involving the entire organization, can mitigate disaster under these circumstances. The plan should consider: What happens when a mission-critical component is unavailable to support the business? What is the impact of these failures on the business? How prepared are we to respond to component failures that support mission critical activities? What can we do to prevent or mitigate these disruptions? Who has to be involved in the restoration of the failed business component? Who has to be informed of the problem when the lack of business functionality affects individuals or organizations outside of the company? What steps and processes must occur to maintain business as usual in the event of a failure? Is the failed component repaired, replaced, worked around, abandoned, etc? What and where are the resources to make the business component operational? The greatest uncertainty is when and what will fail. Contingency planning is not just an IT/IS requirement, but an issue for the entire enterprise.

LOOKING AHEAD Securities Industry enters "Streetwide Testing" In March, the Securities Industry ( enters a critical phase in its Y2K compliance effort with a series of "streetwide" tests between the systems of various exchanges, trading systems, clearing and settlement systems, brokerage house systems and market data suppliers. The first test, a check of the flow of market data information, occurred on February 27. Subsequent tests are scheduled on several weekends in March, April and May. The tests are being coordinated by the Securities Industry Association, which represents nearly 800 firms, including investment banks, broker-dealers and mutual fund companies active in all markets and all phases of corporate and public finance.

What About The 9s? Reports have appeared in the media lately warning of potential date-related problems on April 9, 1999 (the 99th day of 1999) and again on September 9, 1999 (9-9-99). In certain programs, the "9999" string is used as a termination or end of job command. While it is certainly possible that these date-related events could result in some disruptions, the greater danger is that the limited nature of any "9s" related events could breed overconfidence or complacency in Y2K preparedness. "Compared to Y2K, the '9s are a minimal risk," says Fred del Gaudio, President and Chief Operating Officer of Millennia III. For more from this Business Wire series, visit:

9. "S.O.S." - You've Been Misinformed

In March, 1899 the 1st wireless distress signal (help) was sent by Morse code when the S.S. Mathews ran into the East Goodwin Lightship. All hands were rescued.

In Dec. 1905 the 1st use of a distress call by an American vessel was made by the relief ship No. 58 on station at Nantucket shoals. The call was "Nantucket Shoals Lightship in distress send aid from anywhere". The light tender Azalea responded in a roaring gale. Both vessels were tossed about like canoes during maneuvers to get a line to the sinking ship. The crew was rescued, the lightship sinking 10 minutes later.

The need for an Int'l distress was 1st envisioned by the Italian delegates to a conference held at Berlin in 1903. They suggested the letters "SSSDDD" be the Morse request for "help", but the only outcome was the protocol that " wireless telegraph stations must give priority to calls for help".

In 1904 the Marconi Wireless Co. took it upon itself to fill the need for a distress call, by instructing its operators to use the signal "CQD" when any ship was in distress, with the approval of the vessel master. "CQ" was adopted because British operators mostly came from the railroads where they used "CQ" as the general Morse call. However, they soon realized "CQ" did not express the urgency essential when disaster strikes. The letter "D" was added perhaps to signify danger. Even with "CQD", confusion continued because some countries insisted on using their own signals.

It was not until 1908 that what we now refer to as "SOS" was used. Still, the old "CQD" was not easily forgotten. Jack Phillips used both "CQD" & "SOS" when the R.M.S. Titanic sank in 1912. The 1st American vessel to send an "SOS" was the passenger freighter S.S. Arapahoe, Aug 11,1909, when her shaft snapped off in a gale near Cape Hatteras, drifting helplessly toward Diamond Shoals. The S.S. Iroquois responded, taking Arapahoe with 150 passengers in tow to safety.

By 1912, "SOS" had come into Int'l general use. Few realize that the distress call is not in fact "SOS", but rather an unbroken series of three dots three dashes three dots, without pause. The distress signal is neither an abbreviation or contraction. It does not signify "SAVE OUR SHIP', or 'SAVE OUR SOULS'. The signal SOS was made mandatory on May 25, 1912 after the Titanic sinking. Submitted by Maritime Mobile Amateur Radio Club which you may visit through our marine reference center:

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