The Cargo Letter

THE CARGO LETTER [345]
Air & Ocean Freight Forwarder - Customs Broker News
13 October 1999

Good Wednesday 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." Today LAX has announced that all systems are fully Y2K compliant! But sadly, we again must feature tragic Pirate news and reports of mass murder on the high seas. Why no one else covers this important news is a bit of a mystery. Also this month, please help us find the very missing M/V Kobe Queen 1, our top story.

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

INDEX to The Cargo Letter:

OUR Top Story
   1. The Search For M/V Kobe Queen 1
OUR "A" Section: Trade, Financial & Inland News
   2.  Freight Forwarder Trade Briefs
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
   5. The Cargo Letter Cargo Damage Dispatches
      * Back By Popular Demand
OUR "D" Section: FF in Cyberspace
   6. The Cargo Letter "Cyber Ports Of Call"
OUR "E" Section: The Forwarder/Broker World
   7. Int'l Forwarders Go 'Code Red' in Japan
   8. Mass Arrest of Customs Officials
      * Biggest Scandal In China
      * Some Officials Flee
   9. Last Farewell To Tall Ships
  10. Top 10 Ways Columbus' Crew Passed The Time 
      During Their Two-Month Voyage

OUR Top Story

1. The Search For M/V Kobe Queen 1

LAX - 12 Oct. 1999 -- A party with cargo interest aboard the M/V KOBE QUEEN 1, Panamanian Registry, Greek ownership, Ukrainian operation, is offering a very substantial reward for information leading to vessel location and cargo recovery, guaranteed by in cash by The Cargo Letter. M/V KOBE QUEEN 1 was scheduled to arrive Rio Haina, Dominican Republic, in early August 1999 and has failed to arrive. Cargo interests suspect that the vessel may attempt to sell her cargo, including steel, in an unknown port. Notifications should be sent to The Cargo Letter. URGENT. Please send us full details by e-mail, phone or fax. Contact information is always at the end of this page.

Vessel details are:
Name:		M/V KOBE QUEEN 1 (ex M/V Barenbels)
Type:		GGC -- General Cargo
Flag:		Panama
Class:		GL/NV
Gross:		12,156
DWT:		18,500
Built:		1976
Length overall:	148.9 m
Beam:		23.0 m
Depth:		13.0 m
Hull type:	Double bottom
Call Sign:	3FVM8
Owners:		NOMINATOR, Greece

We must find M/V Kobe Queen 1. She may be re-flagged or re-named. Please check your local harbor. This matter is very important to us. McD

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

2. Freight Forwarder Trade Briefs

• Is The 1999 FIATA In Danger? ........... as Reuters reported yesterday that an association of Israeli freight agents says it has asked for the FIATA World Congress in Dubai to be canceled after learning it has been barred from sending a delegation. The decision by the immigration authorities in the Arab emirate to refuse permission for entry to the Israel Federation of Forwarders & Customs Clearance Agents has sparked protests from parallel organizations in several countries. The annual conference of the International Federation of Freight Forwarders Associations (FIATA) is due to begin in Dubai on Oct. 22. "On Sept. 18 we received a fax from FIATA in Switzerland with our visas for Dubai," said Amir Shani, chairman of the Israel Federation. "The next day they told us it was a mistake and that the immigration office of Dubai had reconsidered." "FIATA told us at the end of the week we can appoint a proxy. I replied that this is not acceptable," he told Reuters. Shani said he had complained to the non-political FIATA, and asked that the conference be canceled. If the conference went ahead, there should be a declaration at the start "stating Israel is absent because of the Dubai government," he said. "We have also said we would weigh leaving the association," he added. He said several delegations have lodged protests with Dubai. The Canadian association had urged that in future a country holding the congress should have to agree that there would be no obstacle to attendance by all FIATA members. Last years World Congress was held at Sydney and attended by Michael S. McDaniel of The Cargo Letter and representatives of 97 nations, without restriction. This was as it should be. Politics aside, this is a sad situation for our FIATA and for our entire industry as we begin the new millennium. Please make it your business to watch this situation closely and send your comments for our next edition of The Cargo Letter.
• New North Korea Rules ............ as restrictions against North Korea will be eased on:
  • U.S. imports of raw materials & most goods made in North Korea.
  • Sales of most U.S. consumer goods and financial services to North Korea.
  • U.S. investment in agriculture, mining, petroleum, timber, transportation, road building, travel and tourism.
  • Direct financial help from U.S. citizens to relatives or other individual North Koreans.
  • U.S. transport of ordinary cargo to and from North Korea by ship and plane.
  • Commercial flights between the United States and North Korea. But Some Restrictions Remain On:
  • Sales of U.S. weapons & missile-related technology.
  • Unlicensed export of "dual-use" goods or technology - items that could have military uses - regulated by the Commerce Dept.
  • U.S. foreign aid, including help from the Peace Corps & the Export-Import Bank Act.
  • U.S. support for other Int'l loans to North Korea.
  • Unauthorized financial transactions between U.S. individuals & the North Korean government.
• ITA Wants You .......... as the U.S. Int'l Trade Administration (ITA) is inviting U.S. companies to participate in the following trade missions:
  1. Chile, Uruguay, and Argentina (November 8-13, 1999);
  2. The Hague, Netherlands; Munich, Germany; Milan, Italy; & Paris, France (November 1-10, 1999);
  3. Madrid, Spain; & Milan, Italy (February 28-March 3, 2000);
  4. Santo Domingo & Puerta Plata, Dominican Republic (February 8-11, 2000).
  5. Jordan, Israel, West Bank/Gaza, and Egypt on October 9-15,1999.
  6. Saudi Arabia & the United Arab Emirates on October 15-18, 1999.
• NCBFAA: SBA Goes Too Far ........... as the National Customs Brokers and Forwarders Association of America says that the U.S. Small Business Administration's proposed size standards for the industry go too far. The SBA went beyond the industry group's initial request to exclude transport costs from their annual gross revenue. The agency now wants to include non-vessel-operating common carriers in the size standard definition. The SBA also proposed to reduce size standards for brokers, forwarders & NVOs from US$18.5M with transportation costs to US$5M without these costs. The NCBFAA believes a US$10M size standard more accurately reflects a small business in the industry. It also would like the SBA to exclude NVOs from the industry's small business code until further study. The NCBFAA, however, did praise the SBA for eliminating transportation costs from the industry's annual gross revenues. "The duties & transport charges that we collect are often considerable and have distorted our true size when they are incorporated into our gross receipts," said Peter H. Powell, Sr., president of NCBFAA.
• Countryman & McDaniel To MIA .......... as Michael S. McDaniel Esq., of the the firm will address the Air Cargo Americas V * International Congress & Exhibition on 27 Oct. 1999, at the Radisson Centre. A featured presentation, McDaniel will speak on "Major Changes To The Warsaw Convention As Amended By Montreal Protocols 4 & 5." Sponsored by The Journal of Commerce, World Trade Center Miami, FedEx, DHL, AA Cargo, Martinair Cargo, MIA CFS, Miami-Dade Airport Dept. & Arrow Air, this year's theme is "Advanced Logistics for the 21st Century: Challenges & Opportunities in the Western Hemisphere." In 1997 the event was attended by over 5,000 industry executives from 43 countries. Registration remains available OnLine. http://www.worldtrade.org
• Uncle Sam Reconsiders HHG ........... as the U.S. Military's Transportation Command wants to use the results of a new survey to improve the Defense Dept.'s movement of household goods (HHG). The survey is the 2nd since Sept., and will allow recipients who have moved during the past 3 years an opportunity to rate their moving experience. The U.S. Transportation Command, based at Scott Air Force Base in Illinois, has hired consulting firms American Management Systems & the Hay Group to conduct the surveys. The military contracts with 1,351 carriers in the U.S. to move military household goods.
• Customs Looks Ahead ........... as systems developers from around the country gathered in Crystal City, Va., on 8 Oct. to gain insights into what it will take to build Customs' future computer system. The agency wants to replace its 16-year-old Automated Commercial System, which Customs says is no longer flexible enough to handle future industry data. Earlier this year, Customs hired Mitre Corp. to assist in developing a blueprint for its future system, the Automated Commercial Environment (ACE). Customs plans to start the bidding process in January. A contract is expected to be awarded by June 2000. Customs says that it will cost US$1.4B to US$1.8B to build ACE during the next 4 years. But that system is only part of what Customs expects the contractor to do. The contractor is also expected to modernize other agency systems, such as finance, passenger, outbound, enforcement & human resources. The contract could last as long as 15 years, the agency said.
• Ex. Dec. OnLine ......... as the U.S. Census Bureau has unveiled its Internet link to the Automated Export System. The new service, "AESDirect", allows shippers of any size to file their shippers export declarations to AES free of charge. The Internet service was created by software developer Flagship Customs Services on behalf of the agency. Although the original intent of the Internet service was to target small exporters & forwarders, AESDirect will help to ease the transition for some large shippers coming off the agency's 30-year-old Automated Export Reporting Program, which will be turned off Dec. 31. AES will become the only electronic way for the government to process export declarations. AESDirect will also serve as a backup to those exporters & forwarders that experience year-2000 systems problems. Filers can submit export declarations one at a time or in batches of up to 2,000. Before a filer can use the Internet service, the company must register with Census. That can be done by accessing the website: http://www.AESDirect.gov
• Customs ABI Software ......... as Vastera, a provider of Int'l trade logistics solutions, has announced that the U.S. Customs Service has certified the Automated Broker Interface (ABI) within its software solution, Global Passport. The ABI is a component of the U.S. Customs Service's Automated Commercial System that permits qualified participants to electronically file required import data with Customs. While ABI is a voluntary program available to brokers, importers, carriers, port authorities & independent service centers, over 96% of all entries filed with Customs are filed through ABI. http://www.vastera.com/
• Preshipment Inspection Disputes ........ as a Journal of Commerce article reports that pre-shipment inspections required on shipments to many countries are generating disputes, as some specialists argue that certain verification companies' pricing of goods may not reflect reality. The article notes that the U.S. has fought pre-shipment inspection regimes, considering them essentially non-tariff barriers to trade.
• Interpool Continues Ahead ........... as Int'l container & equipment lessor Interpool Inc. has offered to buy Cronos Group, a competing marine container lessor. Interpool has offered to negotiate to buy Cronos through its affiliate Container Applications Inc., for US$5 per share, about 33.3% over a recent closing price for Cronos shares. Interpool has filed preliminary proxy materials with the Securities & Exchange Commission, which would be used to solicit proxies from Cronos' shareholders to elect five nominees to Cronos' six-person board at Cronos annual meeting to be held Oct. 26. Raoul J. Witteveen, president, COO & CFO of Interpool, said his company & Cronos had been in negotiations for several months. The Cronos board will now consider the deal. Interpool will pay a cash dividend of US3.75 cents per share for the 3rd quarter of 1999. The dividend will be payable on October 15, 1999, Interpool is corporate sponsor of The Cargo Letter library & archiv es, a leader in service to the industry.
• UK Railtrack Gives Up Safety Role .............. as the company that runs Britain's railway infrastructure, will be stripped of its role as overseer of safety in the wake of last week's fatal train crash in London, the government said on 10 Oct. As teams continued to look for bodies in the charred & twisted wreckage of the two commuter trains, police said on Sunday the final death toll was likely to be between 30 & 40. Estimates of the number of fatalities have been scaled down regularly as police locate missing passengers. An initial report said the 5 Oct. collision near London's Paddington station was probably caused by one of the trains running through a red light. Railtrack says it will back the parceling off of its safety role but insisted it was not at fault in the crash.
• Slav Intermodal Rail Link Reopens .......... as Intercontainer-Interfrigo, the European intermodal operator, has resumed its international freight train service transiting via Yugoslavia. The line via Yugoslavia to Greece and Macedonia had been closed since the beginning of the war in Kosovo. The 1st train, which operated on Sept. 18, carried 46 TEUs from the intermodal hub of Sopron, Hungary, to Skopje, Macedonia. Compared to the route via Romania, the Yugoslav route saves 2 days for shipments to Thessaloniki, in Greece, and 4 days for shipments to Skopje.
• Fritz Continues 11 Year FedEx Relationship ........... as Federal Express awarded Fritz Companies long term contract renewals. The contract is about U.S. Customs brokerage services for 3 FedEx locations in the U.S. Fritz has provided U.S. customs brokerage service for FedEx since 1988. Fritz Companies also provides customs brokerage services for FedEx in select European, Central and South American countries, including Guatemala, El Salvador, Brazil, Venezuela & Finland.
• Panalpina Strikes New China Deal .............. as the Swiss forwarding & logistics group has signed a long-term partnership agreement with Sinotrans, China's biggest forwarder. The agreement goes "far beyond the agency agreements signed by the 2 parties and their subsidiaries since 1985," according to Panalpina. The agreement aims to develop long-term cooperation in air & sea freight, land feeder services, warehousing & distribution, project and trade fair forwarding, shipping agency and charter business. Cooperation will also extend to information technology development work, including joint training & management development programs. Sinotrans has a domestic network in China comprising 52 subsidiaries & 238 joint ventures. It is also a shipping company with a 2 million deadweight ton fleet and operates 35 Int'l container services.
• Ingram Micro Gets Wooden Shoes ........ as American computer distributor Ingram Micro is to build a European distribution center in Tilburg, The Netherlands.
• Circle Gets A New Lifestyle .............. as LifeStyle Furnishings Int'l, Ltd., the world's largest manufacturer residential furniture, has selected Circle Int'l as its national customs broker for the U.S. Certain LFI divisions and will utilize Circle for air & ocean freight transportation as well. LifeStyle Furnishings International has 14 operating divisions whose brands include such well-known names as Drexel Heritage, Lexington, Berkline, Benchcraft, The Robert Allen Group, Henredon, Maitland-Smith & LaBarge.
• Circle Gets The Gold, Again ......... as it has been named the customs brokerage & freight forwarding services contractor for the Olympic Winter Games of 2002 in Salt Lake City. Circle acted in a similar role for the 1996 Centennial Olympic Games in Atlanta.
• Jardine Gets Some Class ............ as Hong Kong-based Jardine Logistics has received an A-Class forwarding license from China's Ministry of Foreign Trade and Economic Cooperation for its newly formed joint venture, Jardine-CCTA Logistics Services, in China. After more than a decade of operating liaison offices in Beijing, Tianjin, Dalian, Tsingdao, Shanghai & Shenzhen, Jardine Logistics can now offer a full range of Int'l sea and airfreight forwarding services. Indeed, this is an "E" ticket.
• GeoLogistics Says, "Don't Be So Negative" ........... as the highly-leveraged forwarding & logistics group, reported a negative stockholders' equity of US$27M at the end of June, a recent filing with the U.S. Securities & Exchange Commission shows. GeoLogistics' long-term debts rose to US$215M at the end of June, from US$183M on Dec. 31, 1998, as the company's losses ate into its stockholders' equity.
• Something Is Fishy At BAX .......... as BAX Global initiated "BAXMart," to help avoid logistical problems related to shipping of fresh seafood & to open opportunities for food service distributors & operators who were previously unable to carry fresh seafood. The system allows seafood suppliers to display their daily inventories on the BAXMart.com site. Food distributors & distributor reps throughout the U.S. can access pricing information, including taxed distribution costs to their specific location, and place sales orders for seafood products. In addition, since supplier inventories are managed in real time, reps can check for availability of products in the system's virtual warehouse without having to call multiple suppliers. http://www.baxmart.com/
• Electronic Cargo Insurance Certificates ........... as MOAC, the CNA Maritime Div., announces the 1st U.S. installation of "Ocean Marine Manager," an electronic cargo certificate issuance system that automates the issuance of cargo certificates and the processing of import declarations. The installation took place in the offices of Global Bond & Marine of America and their customer, Transoceanic Shipping Company, Inc., a forwarder, both in Houston, TX. Cargo policies are traditionally issued as open policies wherein an insured issues a certificate or import declaration that accompanies a shipment of goods. The certificate or a report of these shipments is then forwarded to the insurer & broker for billing purposes. The automated version of this allows the insured to issue the certificate & forward it to their broker and insurance company by E-mail or diskette.
• U.S. Postal Service Goes "E" ......... as an advertising venture with its biggest E-Commerce customer Amazon.com begins. It will be a joint print & broadcast campaign, aimed at making USPS more competitive in the fast growing market for fulfillment in E-Commerce. Amazon sends roughly 65% of its books & CD's through the USPS network, but works with competitors of USPS for overnight delivery.
• Why, I Thought I Parked Over There! .......... as Interpol has seen a surge in car theft worldwide this year, with 1.7 million vehicles reported stolen compared with 1.1 million last year. Most cars stolen in Europe are smuggled to eastern Europe, the former Soviet Union & the Middle East. For cars from the U.S., don't even ask.
• Hellman Gets New Latin America Chief ......... as Fernando Arias has been named as Executive Manager for Hellmann’s Latin American Development Board, with over 12 years management experience in logistics throughout the Latin at such companies as: Lufthansa, Fritz, Aviomar & Aerofloral. Hellmann Worldwide Logistics, Inc. is a 128-year old family-owned company currently operated by the 4th generation of Hellmann family members with 368 offices in 128 countries.
• Free Internet Access For Everyone From UPS! ........ as it is offering free fenced Internet access to UPS Web sites via UPS OnLine World Link so customers can take advantage of online shipping and digital document delivery services. Wow, cruising the net for free. You ask if there is a catch? Why yes, you'll only be able to cruise to the UPS website. It's a new thing called "fenced access." http//:www.ups.com
• Microsoft Y2K Help .......... as the year 2000 is rapidly approaching, there are simple steps you can take to get your hardware, software & data ready. Microsoft wants to make sure you have the information you need to make this transition as easy as possible. In order to keep you updated, it's set up a Web site to address your questions. http://www.microsoft.com/y2k
• New Computer Says "Beat Me!" .............. as Dolch Computer Systems has announced "TransPAC II" (Transportation Portable Add-in Computer), a new portable designed specifically for bone jarring transport service on ships, trains, trucks & military cargo airplanes. Quick-release mounted, it has been fully qualified to military standards for heart-stopping shock loads & random vibration that would destroy ordinary computer equipment. Although designed to meet stringent military specifications, it is said to meet commercial/industrial price points that are multiples less than those for most MIL-spec hardware. Selected by Boeing as the load computer for the C-17 Globemaster III, it will see service with the US Air Force before year's end. http://www.dolch.com/html/transpac-pr.html
• Well, They Had Ordered Some "Herb" .......... as U.S. Customs agents in Florida seized 4,181 pounds (1,900 kg) of marijuana from an aromatic cargo shipment labeled ``seasonings,'' investigators said on 1 Oct. The bundles of marijuana were nestled amid boxes of curry powder, garlic & other pungent seasonings in an apparent attempt to disguise the aroma. The shipment arrived at Ft. Lauderdale-Hollywood Int'l Airport aboard an Amerijet Int'l cargo flight from Kingston, Jamaica, on Sept. 23 and was trucked to a warehouse. Indeed, one herb is not like another.
• Just In Time For Halloween: Spider Woman! ......... as on 24 Sept. German Customs agents announced a huge capture of illegal & creepy passengers at Frankfurt's airport: 1,300 Mexican spiders hidden in the luggage of a French woman. The woman, who was not identified, was arrested Sept. 3 on suspicion of smuggling a protected species, customs officials said. The estimated value of the hairy Mexican bird spiders was US$475,000. Agents became suspicious because the woman had an unusually large amount of luggage for the short trip she had been on. The manner in which the luggage was packed also indicated professional smuggling, a customs statement said. All of the spiders were female, and 112 of them had died during the trip. The survivors, most of them pregnant (obviously hoping to become German citizens), were placed with various zoo facilities for care, pending return to their natural habitat, customs said.

OUR "B" Section: FF World Air News

3. Freight Forwarder World Air Briefs

• Y2K Looms ............. as 34 countries out of 185 members of the Int'l Civil Aviation Organization (ICAO) have not responded to a survey by the organization to assess airport and aviation infrastructure preparedness for the millennium bug. Most of the countries not responding are located in Asia, South America & Eastern Europe. The Int'l Federation of Air Line Pilot Associations (IFALPA) recommends that pilots flying on New Years Eve over one of these regions carry an extra 30 minutes of fuel as some airports may close unexpectedly. The IFALP is also asking the ICAO that it pressures its members to open military airports to civilian traffic if civilian airports are closed. As to individual airlines, KLM has announced it will be operating a reduced schedule on New Year's Eve & New Year's Day due to weak consumer demand. KLM partner Northwest Airlines has also canceled 4 flights between Amsterdam and destinations in the US & India. Australian carrier Ansett has canceled all flights for a 13 hour period over starting on Dec. 31, 1999, and ending on Jan. 1, 2000. Ansett said the decision had nothing to do with concerns over the millennium bug and was simply a case of Ansett's customers not wanting to spend New Year's Eve on a plane. Finnair has canceled all flights between Helsinki and Moscow during the period, saying its decision is based solely on low reservation numbers. But Russian sources insist almost all seats were booked on the canceled flights. Finnair had no further comment. The U.S. Dept. Of Transportation says that U.S. airlines carrying 95% of passenger & cargo traffic in the U.S. have reported they would be ready by the end of Sept. for Y2K. See the U.S. Dept. of Transportation, Int' l Civil Aviation Y2K Review. On 12 Oct. LAX reported it's readiness. >>>> Our view, forget travel and get your T.V. set ready for 31 Dec. http://www.y2ktransport.dot.gov/fly2k/
• Aisia Wins Volumes Report ......... as airports in the Asia-Pacific region had a sharp growth in cargo volumes handled in May, according to statistics published by Geneva-based Airports Council Int'l. Asia-Pacific airports reported a cargo traffic increase of 12.7% in May, to 1.23 million metric tons, the fastest growth rate of any region. Strong figures were reported by the major Asian airports of Hong Kong (up 11.1%), Tokyo-Narita (up 12.9%), Seoul (up 16.2%), Singapore (up 13.4%), Bangkok (up 19.5%), Osaka (up 9.5%) Shanghai (up 38.4%). No. America airports handled 2.26 million tons in May, an increase of 2.8%. European airports reported a combined volume of 833,362 tons, up 1.8%. World airport cargo traffic was 4.69 million tons, up 4.4%.
• "Semi-Secret" Qantas Crash ............ as our colleague Alan Polivnick Esq. at Sydney reports that a QANTAS B747-438 crash landed at Bangkok just over 2 weeks ago. There were no injuries or deaths so it was only really news in Australia because of QANTAS' excellent safety record. This was the 1st incident since 1960. There were no casualties, other than the airline's pride & insurance premiums. See the amazing photos of this crash at our own Gallery of Cargo Loss web site feature. https://cargolaw.com/gallery.html
• FedEx Chief To Retire ......... as Theodore L. "Ted" Weise plans to retire as president and chief executive officer ("CEO") of Federal Express Corp. at the end of January 2000. An airline transport pilot and former senior vice president of air operations, Weise will continue to serve on the FedEx operating company board and as a consultant to the air operations division after his retirement from the company. David J. Bronczek, current FedEx executive vice president and chief operating officer, will succeed Weise as president & CEO.
• FedEx Opens Biggest Foreign Hub ............ as it has officially opened the new European hub at Roissy-Charles de Gaulle airport in Paris, France. The 77,000 square meter facility is the largest FedEx hub outside the U.S. and improves connectivity for FedEx customers, shipping internationally to, from and within Europe, the Middle East & Africa. The US$200M CDG hub project was jointly funded over the past three years by FedEx and Aeroports de Paris (ADP).
• U.S. Tells EU To Hush Up .......... as a U.S. House of Representatives panel has given the nod of approval to a non-binding resolution urging U.S. Commerce, Transportation & State officials to take action against the European Union following its plans to ban aircraft fitted with noise-muffling "hushkits" from flying in the EU next year. The EU postponed the hushkit ban by one month until May 2000, after the U.S. threatened to ban Air France & British Airways from flying Concord to the U.S. in retaliation. U.S. House members have now voiced their dissent at the EU's decision to go ahead with the ban, saying a postponement is not good enough.
• Thai Deregulation "Thai-ed" Up ............ as deregulation of Thailand's skies and privatization of Thai Airways, due in September 2000 under a commitment Thailand made as part of a 1997 Int'l Monetary Fund loan package, are facing delays. Deregulation whould allow competition with Thai Airways International for the 1st time in 50 years. Sentiment in Bangkok is that the government may not be able to live up to its promises. The state is currently a 93% shareholder in Thai Airways, a stake to be reduced to 70% by year's end, and 50% ultimately. A new schedule has not been announced.
• TNT Posted To 500 .......... as TNT Post Group has suddenly appeared in the Fortune 500. TPG became 3rd in the category Mail, Packaging & Freight Delivery.
• Mexico Fright Flights .................as a 3rd of all airplanes owned by Mexican airlines are so unsafe that they are prohibited from landing in airports in the U.S., according to a pilots association report printed in the Mexican newspaper Reforma. The report by a research arm of the Mexican Airline Pilots Union (ASPA) singled out small Mexican airlines Taesa, Aviacsa, Aerocalifornia & Aerocozumel, saying that the average plane owned by these 4 companies is 21 to 30 years old. "Mexican regulations allow these airlines to fly their junk planes inside Mexico," Reforma quoted pilots union general secretary Manuel Gonzalez Flores, who added due to the fact that civil aviation regulations in the United States are very strict, these junk planes cannot travel to that country because they are a safety risk." The report did not question the safety of Aeromexico & Mexicana de Aviacion, the country's 2 largest lines.
• China Air Ignored Safety .............. as the China Air MD-11 that crashed in Hong Kong on 22 Aug. attempted to land in crosswind gusts that exceeded the airline's flight manual limits & challenged the aircraft's limits, according to a preliminary crash report. Hong Kong's Civil Aviation Department (CAD) said the wind was blowing at 28 knots with bursts of up to 36 knots. Investigators determined the crew ignored all safeguards as the airlines own MD-11 flight operations manual specifies the maximum acceptable crosswind when landing on a wet runway is 24 knots. The same manual also states the MD-11 has a maximum demonstrated crosswind limit of 35 knots. The report says the planes starboard engine struck the runway as it made a hard landing on its right wheels. Fire flared on contact & the right wing broke off as the plane rolled over & ended belly up next to the runway. Three people were killed. Read of the officials who were fired, and other consequences, as a result of this disaster in The Cargo Letter [344].
• Air Rates Up? ........... as the result of increasing fuel costs. In the short term, Asian carriers are expected to bear the brunt of higher fuel costs. Such moves have already been taken by Delta & Continental in the U.S. However if fuel costs continue to rise, analysts predict a repeat of 1996, when the Int'l Air Transport Assn. endorsed increases in air cargo rates to cover the cost of aviation fuel prices, which rose to US$30 per barrel.
• UPS To Muzzle Gun Shipments ......... as United Parcel Service says it will stop delivering handguns through its regular service, saying it was taking the step to help prevent thefts of weapons. Beginning 11 Oct. Atlanta-based UPS will ship handguns only through its Next Day Air service, which costs 3 to 4 times as much as ground service. So now you'll get your piece a little quicker. The company will continue to ship long guns, rifles & shotguns by ground, thus permitting thieves to meet scheduled hunting or riot events.
• The Delta Dump ......... as it has sold all 35.2 million shares of Singapore Airlines (SIA) held since 1989. Simultaneously, Delta repurchased the 5 million shares of Delta stock held by Singapore over that same period. The shares in Singapore were sold at a price near a 52 week high for that company, while the repurchase of Delta stock was accomplished at an average price near Delta's 12-month low. These transactions will result in a before tax gain to Delta of approximately US$140M & net cash proceeds of approximately US$75M. The tax man will be interested, but the story is not over. In a separate transaction in early August, Delta participated in a public offering by priceline.com In that transaction Delta sold approximately 1.8 million shares of priceline stock & received before tax proceeds of approximately US$115M. Upon completion of the sale Delta held 16.8 million fully vested warrants for Priceline stock. William Shatner suggests we all watch Priceline.com.
• India Cuts Express Slack ........... as a Journal of Commerce article reports that India's Ministry of Finance has liberalized import & export rules for express companies by increasing the weight limit for a single consignment to 70 kg (from 32 kg) and withdrawing a ban on export consignments valued at more than US$575.
• Air Canada Grab Scrap Continues ......... and might lead to two of the largest US airlines pitting against each other. A Toronto conglomerate, Onex, has announced it wants to buy both Air Canada &Canadian Airlines and merge the two carriers into one, but Air Canada continues to aggressively resist the takeover attempt as reported in The Cargo Letter [344]. Onex is offering US$1.2B in cash and would assume US$2.7B in debt, but Air Canada charges that Onex is merely a front for American Airlines which is funding the Onex bid. American Airlines has a 25% stake in Canadian Airlines and has come out in favor of the Onex take over bid, even though it would reduce its share in the combined carrier to 15%. Canadian Airlines has not officially commented on Onex's offer but the carrier is preparing a leaflet to be distributed to its passengers which contains nothing but positive comments regarding a new Canadian airline borne of the merger of Air Canada & Canadian Airlines. The Onex bid may be the last chance at survival for Canadian Airlines. The carrier had announced previously that it would shut down in spring if it didn't receive an infusion in cash.
• UPS Gets More Loopy ........ as United Parcel Service will add a 3rd B767 freighter to its "around the world" service loop this month. The B767-300 freighter will fly out of UPS's hub in Louisville on Sundays to Cologne, Sharjah and Bombay, landing in Taipei on Wednesdays. It will then return to Louisville on Saturdays having flown through Bombay, Sharjah, Cologne & Anchorage on its return.
• American Switched In Paris .......... as American Airlines has moved it's Paris operations from Orly Airport to Roissy-Charles de Gaulle.
• Polar Air Strike Fear Chilled .......... as Polar Air Cargo & the Air Line Pilots Assn. Int'l, which represents Polar's crew members, have resulted in an agreement on an initial contract. The company's scheduled services will continue uninterrupted. The agreement will shortly be presented by the union to Polar crewmembers for ratification. The company expressed its gratitude to the Nat'l Mediation Board for its assistance to the parties in reaching the accord. Similarly, the cockpit crewmembers of Tower Air, represented by the Air Line Pilots Assn. Int'l, reached a tentative agreement in principle on their 1st ALPA contract with management on Fri. Oct. 1, 1999.
• Delta Pilots By The Hour ........ as Atlanta-based Delta Air Lines has reached a tentative agreement with its pilots that will allow Delta to operate B-777 & B-767-400 aircraft. A dispute over how much pilots will be paid to operate the new aircraft types force Delta to delay delivery of some B777 planes this year. The two-engine B-777, generally regarded as an excellent passenger plane for carrying belly cargo, allows airlines to operate more cheaply on long-haul routes. The new agreement, which must be approved by Air Line Pilots Assn., sets pay rates for the B-777 at US$250 per hour and for the B-767-400 at US$230 per hour.
• You Can't Get There From Here .......... as talks between the Philippines & Taiwan have ended without settlement, leading to the severing of all aviation ties between the two countries. In a measure to protect its ailing flag carrier PAL, the Philippines had sought to impose restrictions on foreign airlines with regard to passenger capacity. On the Manila-Taipei route, the authorities attempted to impose a limit of 3000 seats per week on China Airlines & EVA Air. Industry officials in the Philippines have accused both airlines of price-cutting aimed at filling aircraft. Earlier this year, Emirates lost its right to fly between Hong Kong & Manila.
• Clean Out Your Christmas Club Account! ............ as Jordan has invited global investors interested in acquiring a 49% stake in the country's state carrier Royal Jordanian (RJ) to submit expressions of interest by Oct. 27. Jordan sought strategic partners who are either an airline company or a consortium led by an airline company and including financial investors. Since the late 1980's the government has studied the restructuring & privatization of RJ to help restore the financial health of the company, straddled with around US$846M of foreign & domestic debts. RJ's current international destinations stretch across the U.S., Europe, North Africa, the Middle East, the Gulf & South Asia. A total of 1.2 million passengers & 70,000 tons of cargo were flown by RJ last year.
• Take Three ........... as Pan Am is to take to the skies again on low-fare flights between Orlando, Florida & Portsmouth, New Hampshire. The original Pan Am took to the skies in the late 1920's, but its name & logo of the company were sold to investors when the airline went bankrupt in the 1980's. Pan Am went from operating one of the largest Int'l networks to a low-fare operation linking several cities in the U.S. to resort destinations in Florida before filing for bankruptcy a second time in June 1998. New owners operated a charter business with B-727s and prepared their return to scheduled service. Pan Am's latest attempt will feature remodeled B-727s with seating reduced from 173 to 149 to offer greater comfort. Pan Am will also try to woo passengers by offering premium food both in flight & at check-in at a low fare through tight cost control and flights from smaller airports with lower landing costs & no delay associated to heavy traffic.
• BA Goes Down Under in Hong Kong ......... as British Airways & Qantas have announced the intention to combine their commercial operations in Hong Kong from April 2000.
• JAL Independent For Cargo ......... as Japan Airlines, the world's 7th largest In'tl air freight carrier, has announced it will set up an independent operating unit to manage its cargo operations in April 2000.
• TNT Speeds To Europe ........... as TNT, the Int'l express delivery arm of TNT Post Group, has introduced an "Economy Express" service that offers delivery of shipments moving from the Northeastern U.S. to Europe in 3 to 5 days. TNT says the service offers savings of up to 30% over its regular "Global Express."
• Got Plane? ............. as the Congo-Brazzaville carrier LinaCongo is to resume operations after a 3 year long halt. Investors will bring in US$1.3 to lease a single Boeing 737 that LinaCongo will use to resume flights to Luanda (Angola), Libreville (Gabon), Cotonou (Benin) & Johannesburg (South Africa). LinaCongo stopped flying in 1996 due to a lack of an aircraft fit to fly.
• Debonair, Now Less So............ as the British low-cost carrier has canceled all its flights while receivers for the company try to find a solution to resume operations. The airline made a last-ditch attempt to find a buyer on Sept. 30 and was put in administration, to be managed by court appointed receivers who oversee sale of company assets if business cannot be resumed. Such is now a customary problem for EU economy carriers.
• Color It Grounded .......... as Norwegian low-fare carrier Color Air was shut down by its owner after it failed to find additional funds to finance the flagging carrier. The line tried to find buyers for the airline or new sources of financing, but to no avail.
• Forward To Quick .......... as Tennessee-based airfreight trucker Forward Air Corp. has reached an agreement to acquire the air freight-related assets of Alabama-based Quick Delivery Service Inc. Terms were not disclosed. Forward Air said the assets being purchased will be integrated into its own operations, generating an additional US$13M in annual revenue. Quick Delivery provides truckload and less-than-truckload transport services to airlines & forwarders, predominantly in the U.S. Southeast.
• Perhaps The Check Was Mailed? ............. as Malaysian Airlines has failed to make US$1.8M payment due under a lease agreement the airline has with Virginia-based World Airways for an MD-11F freighter. World Airways, itself struggling financially, made the announcement about MAS to warn investors of a potential "material adverse effect" on its earnings if the debt is not resolved. MAS owes World a total of US$22.1M under the wet-lease agreement through Sept. 2000. World said it is in discussions with MAS and also looking for another customer for the MD-11F. Sources say MAS is more than US$3B in debt. On 8 Oct. Malaysian Airline System Bhd (MAS) denied it owed any lease payments to World Airways Inc., the national news agency Bernama said. Meanwhile, MAS & Northwest Airlines have signed a commercial cooperation agreement which will include code-share service.
• US Airways Cargo Skidding ........... as revenue from cargo is way down, the staff has been cut back, cargo handling has been outsourced and now the airline is looking for a new leader. US Airways' senior director for cargo, left abruptly last month after 3 years of poor performance by the division. The airline is adding new capacity and wants a renewed focus on cargo. A search is on to find someone to breathe life into a division that has gotten very little respect from upper management and is losing that of its customers.
• New BAX America Chief .......... as Integrated heavyweight airfreight carrier BAX Global has named Joey Carnes president of the company's U.S. and Canada operations, to be based at BAX headquarters in Irvine, Calif. He comes from Fritz Cos., where he spent 12 years, most recently as executive V.P. of No. America.
• Florence Would Be Proud ......... as KLM Cargo & TCP/Reliable Inc. have joined forces to develop and offer a unique door-to-door conditioning product for pharmaceuticals during shipping. The name of this service will be "Nightingale." Nightingale is a revolutionary and more efficient shipping system, eliminating variations in temperature & humidity throughout the global transportation chain. Exposing most pharma/biological products to very high or low temperatures can make these expensive goods harmful or ineffective. Nightingale may be compared to an "enviro-tunnel" kept at a relatively constant temperature and capable of maintaining temperature stability at any level between -50 degrees C and +50 degrees Celsius. The new system eliminates the need for dry ice that presents certain hazards to present shipping methods.
• Lufthansa's Talking Tracker ......... as Periphonics Corp. has installed a multi-lingual Interactive Voice Response (IVR) system at Lufthansa Cargo. The system, known as ASTRIT, an acronym for Automatisches Sendestatus und Fluginformationssystem or Automated Tracking & Flight Information System, can process calls in any one of four languages: German, Italian, English or French. With a capacity to handle 40,000 calls per month during peak periods. The system, located in Lufthansa's Germany-based call center, can be accessed by callers in the Netherlands, Switzerland, Italy, France, Luxembourg and Austria. Customers with inquires on consignment status information or flight information call ASTRIT using any touch-tone telephone. The information is retrieved from a Unisys Mainframe by the Periphonics system and is then spoken to the callers by the system. In addition, callers are able to obtain a hard copy of the information via fax to document their transactions. http://www.peri.com
• Mark Your TIACA Calendar ........... as the 20th Int'l Air Cargo Forum & Exposition of the Int'l Air Cargo Association (TIACA) will be held Sept. 26 - 29, 2000, at the Marriott Wardman Park Hotel & Conference/Exposition Center, Washington, D.C. The Forum, whose theme is “Dawn of the Air Cargo Century” will have a formal opening on 26 September, followed by 3 days of presentation, discussion and dialogue looking towards air cargo’s next generation. Sessions will be short to allow ample time for networking & exhibit inspection. ACF2000 will be the 20th biennial edition of the popular event, representing 40 years of leadership of TIACA and its predecessor organization in providing this forum for industry leaders. In record years, more than 3,000 delegates & exhibitors have participated. Exhibit space was fully booked at the May 1998 ACF98 in Paris. http://www.tiaca.org
• WANTED: Pilots ......... as Colombian military aircraft have had increasing success in forcing down flights carrying U.S. bound narcotics, prompting drug kingpins to pay their pilots up to US$100,000 per trip, Colombia's armed forces chief said on 8 Oct. Gen. Fernando Tapias told reporters that as an additional incentive, the pilots can receive a bonus of 20% to 30% of the value of the illicit cargo they are delivering. The premium pay commanded by the pilots also reflects their ability to fly at night, thus making detection more difficult, and to land at improvised airstrips, he said. He added that counter-drug flights have forced down 47 narcotics flights over the past year. How about those US$250/hr. Delta flyers?

Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News, Lloyds & other world sources.

OUR "C" Section: FF World Ocean News

4. Freight Forwarder World Ocean Briefs

• Pirate Murders Reported ......... as the Int'l Maritime Bureau (IMB) has cautiously welcomed recent Chinese moves against piracy. The PRC delegate to the IMO, Guo Xin wrote a recent letter to London-based shipping daily Lloyd's List defending China's actions with regard to piracy and, in particular, its decision to repatriate the crew of the cargoship M/V Tenyu which turned up, renamed as M/V Sanei-I in China after being hijacked between Indonesia & Korea. The original crew is feared murdered. Passports & visas carried by the Tenyu's crew prove, according to Ms Guo, that the 16 Indonesian men joined the ship after the hijacking had taken place. She dismissed widely voiced concerns that China had released the alleged perpetrators of the hijacking as 'absolutely groundless." However the IMB claimed that it was certain that the chief mate on the Tenyu when it arrived in China was the same man who had been 2nd mate on an earlier hijacked ship, the M/V Anna Sierra. According to the IMB it was certain that this man had been involved in the actual hijacking of the Anna Sierra. The crew operating that ship was also released by the Chinese authorities. Ms Guo's letter also appeared to contain new information on the bulker M/V Cheung Son, whose 23-strong crew is known to have been murdered. She wrote in her letter:

  "On August 15. 1999, the arch-criminal involved in hijacking the M/V Cheung Son was arrested and the case has been completely settled. This has shown clearly that the Chinese government will, within the full limits of its laws, deal heavy blows to any criminal acts at sea."

  The letter gave no further details. However an IMB spokesman said that the M/V Cheung Son had not yet been located. Meanwhile the 2,000 dwt Thai tanker M/T Siam Xanxai found in Southern China after it was hijacked off Malaysia in June is reportedly to be returned to its owners by the Chinese authorities. All but one of the 17 crew of Thai nationals were dumped overboard into a speed boat and were rescued by local fisherman in Sarawak. One crew member was held hostage to help run the ship. The Chinese police are reported to have arrested 10 Indonesian nationals on piracy charges following the detention of the tanker. Will they be charged with crimes? This story is not over.

• U.S. To Protect Interests ........... as U.S. Federal Maritime Commission (FMC) chairman, Harold Creel, pledged to protect US shipping lines from restrictive foreign shipping laws & policies, following a series of recent takeovers of U.S. shipping lines by non U.S. companies. At a meeting of the American Assn.of Port Authorities in New York, Creel expressed his concern over how the takeovers of major U.S. carriers such as Sea-Land and APL will affect FMC's role in addressing restrictive foreign shipping practices. Creel cited the agency's action in 1997 against Japanese port practices that allegedly discriminated against U.S. flag carriers and said it would continue to take decisive measures against unfair foreign laws that harm U.S. carriers & flag fliers. At the same meeting, the FMC said it will watch out for any innovative approaches to the terms and provisions of new service contracts, following the enactment of the Ocean Shipping Reform Act. Creel said the FMC has been inundated with service contract filings since May 1, due to an increase in the use of individual service contracts following the Reform Act.
• NCBFAA: End Carrier Antitrust Immunity Now ........... as the National Customs Brokers and Forwarders Association of America says Congress should narrow or eliminate antitrust provisions for carriers in the Ocean Shipping Reform Act. "The unregulated antitrust immunity existing today is a throwback to an era of robber barons and cutthroat discriminatory practices," the NCBFAA said. "Coupled with confidential or secret contracts, and with virtual absence of any U.S.-flag carriers, it enables foreign carriers to continue to exploit the U.S. marketplace, primarily at the expense of the smaller shipper, forwarder and non-vessel operating common carrier." In late 1998 Transpacific Stabilization Agreement carriers were alleged to have refused to provide cargo space covered under contracts unless smaller shippers and intermediaries agreed to rate increases and other charges. Some large shippers are also dissatisfied with the OSRA changes. "The antitrust immunized carriers have been able to make a mockery of the confidential aspect of the service contracts that was of such importance to the shippers," NCBFAA said.
• Maersk Line Is Hit ......... as Maersk has agreed to pay a US$925,000 fine for allegedly making illegal rebates to several NVOCCs in the South American & transpacific trades. The Federal Maritime Commission said that its evidence of the carrier's rebating activity covers hundreds of shipments from 1996 to 1998. There was also evidence that Maersk had mislabeled shipments to give some NVOCCs lower rates. The agency began its investigation of Maersk on April 20. Although rebating is claimed to be practiced by carriers in non-U.S. trades, it's illegal under the former 1984 Shipping Act & the new Ocean Shipping Reform Act. Maersk & the FMC's Bureau of Enforcement have agreed to settle the case without further litigation.
• Confidentiality, Not Confidential ............ as 48% of U.S. shippers said that confidentiality of rates allowed under the U.S. Ocean Shipping Reform Act is extremely important, but only 29% believe it is achievable, according to a study commissioned by BDP Int'l. Half of the shippers participating in the survey released said they would trade transit time for the lower cargo price, sacrificing a few days on the water for a lower price. In the study, conducted by Abacus Custom Research Inc., nearly 2/3 of shippers were reluctant to switch to a carrier based solely on price. About 35% said non-vessel-operating common carriers were a viable alternative for ocean transportation.
• Major UK P & I Club Cargo Study ........... as the U.K. Protection & Indemnity Club, the world's largest, has published a major study analyzing the causes & locations of major insurance claims in the shipping industry over a 10-year period. The survey, based on 3,719 large marine claims worth US$1.8B that occurred for the 10 years ended Jan. 1, 1997, covers shipping claims for cargo damage, personal injury, property, collision & pollution. The Club said that cargo claims represent 40% of the number of large claims and 27% of their total value. During the 10-year period, the U.K. P&I club recorded large cargo claims worth US$469M with an average value for each major claim of about US$314,000. There is a trend toward fewer major cargo claims of increasing severity, the P&I club said. The commodities most commonly damaged are, in decreasing order: dry bulk, containers, steel products, bagged bulk, reefer & general cargo. The P&I club's survey recorded fewer large claims concerning car shipments, bulk chemical, crude oil, grain, machinery & oil products.
• Danger Calls At African Ports ........... as Reuters reports that thousands of seafarers risk their lives on unsafe cargo vessels that daily enter the East African ports of Mombasa & Dar es Salaam, trade union officials said yesterday. An estimated 85% of all vessels calling at the Kenyan and Tanzanian ports do not meet basic international safety regulations. "They are sub-standard in terms of accommodation, in terms of conditions in general and in terms of safety,'' Juma Khamis, regional chairman for Africa of the International Federation of Transport Workers (ITF), said. "In all respects they are unseaworthy vessels," he told Reuters. Many of the ships are uninsured & have become an environmental hazard, threatening marine life as well as the lives of the sailors on board. And the vast majority of these sub-standard vessels sail under Flags of Convenience (FOCs), allowing the owners to skimp on safety regulations and putting crews in danger not just of sinking but of potentially life-threatening equipment on board. According to Lloyds shipping statistics, 90% of deaths at sea across the world are on board FOC ships. Direct your cargo accordingly.
• TACA Casts Eyes The Way Up ........... as the Trans-Atlantic Conference agreement has unveiled a controversial proposal in its business plan for 2000, with an unprecedented increase in ocean rates of up to 50%. The conference has proposed a rate hike of US$600 per 20-foot & US$750 per 40-foot container on westbound trades to the Atlantic, Gulf and Pacific coasts, effective January 1, 2000. This would represent a massive 50% jump in average westbound cargo rates. Eastbound trades from the Atlantic and Gulf coasts will also be affected by the proposal, with a rate hike of US$160 per 20-foot & US$200 per 40 or 45-foot container, a 15% increase, according to industry experts. TACA said the rate hike was necessary to ensure reliable, frequent services & provide carriers with an adequate return on capital. TACA said the new rates would provide a starting point for negotiations of renewed contracts, since most transatlantic service agreements expire on Dec. 31, 1999. TACA member carriers are Sea-Land Service, P&O Nedlloyd, NYK, Hapag-Lloyd, OOCL, Maersk Line, Atlantic Container Line, & Mediterranean Shipping Co.
• Happy Birthday MSC! ......... as the U.S. Navy's Military Sealift Command marked 50 years of service as a transportation provider to the Defense Department on Oct. 1. Established in 1949, the Military Sea Transportation Service provided at-sea support and transportation to the Navy & Defense Dept. missions ranging from transport of weapons, supplies & troops to Korea and Vietnam to supporting deep ocean surveys & the Apollo 11 moon mission. The command was renamed the Military Sealift Command in 1970. Today, MSC operates about 120 ships worldwide. The command's newest ships, (large, medium-speed, roll-on/roll-off ships or LMSRs) are almost as large as aircraft carriers. Almost 95% of all cargo needed for military operations travels via MSC. More than 30% of U.S. merchant seamen are also employed on these ships. MSC most recently supported military operations in the Persian Gulf, Somalia, Haiti, Kosovo & humanitarian efforts after Hurricane Mitch &the earthquake in Turkey.
• Evergreen Dreams of Giants ............ as the Taiwanese carrier, says it is considering plans to build 5 new 6,000-TEU containerships. If plans for the newbuildings go ahead, the 6,000-TEU ships would be the largest in the carrier's fleet. At present, Evergreen operates a fleet of 120 vessels, the largest being 5,364 TEU.
• Croatia Line Behind Marine Bars .......... as the Rijeka-based shipping line confirmed that several of its vessels have been arrested by creditors. Croatia Line pulled out of the Mediterranean/U.S. trade about a year ago. Offices of Croatia Line in North America and in Zagreb, Croatia, have been closed.
• Sea-Land Buy, A Go ........... as the European Commission has cleared the acquisition by Maersk Line, of the Danish group A.P. Möller, of the shipping activities & related services, such as terminal handling, of U.S. based Sea-Land Services, part of CSX Corp. The Commission stated that "the merger, while strengthening Maersk's position on the markets for liner shipping & terminal handling, does not create a problem of dominance." The acquired business includes Sea-Land's Int'l liner shipping activities as well as certain container terminals, vessels and other assets & equipment. Sea-Land will retain its U.S. domestic liner shipping business. The US$800M takeover of Sea-Land's Int'l activities was announced by its parent company, CSX Corp., & A.P. Moller, in July.
• Red, White & Blue RO-RO .......... as Wallenus Wilhelmsen Lines has launched a new U.S. flag shipping company, American Roll-On Roll-Off Carrier (ARC), specifically to handle U.S. flag preference cargo. ARC is to charter 3 ships from Automar Int'l Car Carriers. The chartered vessels receive U.S. subsidies to participate in the Voluntary Sealift Agreement program, which means they must give vehicle carrying capacity to the U.S. government in times of national emergency. Primary U.S. ports of call for ARC will be Baltimore, Charleston & Brunswick.
• Hanjin's Visit From The Tax Man ............. as Korea's National Tax Administration is levying US$12M in additional taxes on Hanjin Shipping after completing a special tax investigation of the Hanjin parent group & affiliates. The Hanjin conglomerate is facing an enormous total tax fine of US$450M.
• COSCO's "Tax Man," Now Boss ........... as Xu Lirong, president of the Shanghai Shipping Exchange, China's regulatory agency, has been appointed managing director of COSCO Container Lines, the liner shipping arm of the China Ocean Shipping Co. group. Xu Lirong, born in 1957, has been president of Shanghai Shipping Exchange since the controversial regulatory agency was established in 1996.
• Investing In NOL ........ as mutual fund Invesco has bought a 5% stake in Neptune Orient Lines. The stock price of NOL, the Singapore-based parent company of APL, has increased by about 10% since the company recently announced the appointment of a new team of senior former executives of Maersk Line & Sea-Land Service.
• APL Holds World's Largest Chess Game ........ as observers from around the world felt downright Lilliputian as they watched the 1st chess game played on the largest chess board ever designed, live via the Internet on 4 Sept. from the Port of Rotterdam. This bigger-than-life match used 32 shipping containers, believed to be the largest chess pieces ever played in competition. Each piece was a standard 1 x 20 ft. ocean container and measured in at 20 feet long, by 8 feet wide, by nine and a half feet high. And the players' names don't get much bigger than this either. Russian world chess champion Garry Kasparov matched his skills against Dutch grand master Jan Timman, on a chess board measuring more than a hundred square meters at the ECT container terminal. APL sponsored the event & supplied the "chess set." The massive match waged for over 5 hours, involved some 57 moves, before Jan Timman emerged as the day's big winner. Mobile container cranes were utilized to move the monster-sized chess pieces, and the entire match was viewed in real-time around the world via the Internet through multiple WebCam televisions. The game was part of Rotterdam's World Port Festival. http://www.wereldhavenfestival.nl/schaak/schaak_index.html
• Telex Scam Warning ........... as the Int'l Transport Intermediaries Club (ITIC) has warned ship agents that they could incur substantial costs & heavy fines if they accept instructions from bogus principals operating from a specific telex number in Piraeus, Greece. A number of ITIC members have received instructions originating from the same telex number in Piraeus - 211698 USTC GR. In each case, although the name of the ship was the same as, or similar to, that of an existing vessel, the ship did not exist, said the ITIC. In addition, the name of the instructing entity was similar to a genuine entity, but again did not really exist.
• Ted Arison Passes ......... as the American-Israeli billionaire, the richest man in Israel, who founded Carnival Cruise Lines, died of a heart attack on 1 Oct. He was 75. His daughter Shari will now head the family business.
• Sad Voyage ......... as the bodies of 7 stowaways believed to be Romanian refugees have been found in aboard Cypriot flagged M/V Evangelia II in Seville in southern Spain, carrying a cargo of sunflower seeds. The ship had sailed from the Black Sea port of Constanta in Romania. Spanish radio says the stowaways might have died from suffocation or possibly from a toxic substance used to preserve the seeds in transit. Every year hundreds of immigrants die trying to enter Spain, mostly trying to cross the dangerous Strait of Gibraltar or other coastal waters.
• Call For Papers: 2000 Ship Production Symposium .............. as the 14th Ship Production Symposium & Expo will be held in Williamsburg, VA, Aug. 23-25, 2000. A full technical program of papers, panels, workshops, & industrial visits is planned, along with a guest program that can only be offered in the unique Colonial Williamsburg setting. The Expo will feature 75 US shipyards, marine manufacturers and vendors. The theme for the Symposium is "Advancing US Shipbuilding in the New Millennium." The event is being hosted by the Hampton Roads Section of the Society of Naval Architects & Marine Engineers. One-page abstracts are due October 4, 1999 http://www.sname.org/sections/hampton_roads/ship_production.htm
• This Month In U.S. Naval History ....... as on Oct. 10, 1845, the U.S. Naval Academy was established in Annapolis, Md. On Oct. 6, 1884, the Naval War College in Newport, Rhode Island was established.

5. The Cargo Letter Cargo Damage Dispatches

We're back! "Cargo Damage Dispatches" was one of your most popular features, for years, until Steve Schultz of Whitefish Bay took a much deserved break in 1998 from gathering all the information each month. Indeed, the West Coast's ILWU has put up a special web site, just for our previous reports. We've now brought the feature back for you. The Cargo Letter is searching for volunteers to fill Steve's big shoes. Please let us know of casualties in that most dangerous place ....... out there.

While the casualties below are only a portion of ocean disasters for Sept./Oct. 1999, our ability to gather the info will continue to improve in coming editions. McD

The Egyptian tug/supply vessel MARIDIVE XII (844 gt) sank in bad weather while en route from Port Said to Baltim on Oct 10. The master & 2of his crew were killed. (Oct. 13)

The Panamanian motor bulk carrier M/V SANAGA (14,929 gt), with 26 crew on board, reported in lat 27 34.3S, long 44 13.6E, about 700 miles ENE of Durban, at 1000, UTC, taking water in No.1 hold. Down by head 2.5 meters & at waterline level to Nos. 1 & 2 holds. Ingress to No.2 hold. Nos 1 & 2 decks awash. Heading 258 degs true. (Oct. 12)

Two crewmembers serving on board the 317,000 dwt VLCC tanker M/V Atlantic Prosperity had to be flown to hospital under UK police escort after a knife fight erupted between them. The incident happened as the vessel entered the North Sea after leaving Rotterdam earlier in the day. One man was treated for a stab wound to the shoulder while the other had a severed finger. The doctor worked on them for an hour before allowing them to be airlifted to hospital with a police escort. Although the incident happened outside UK jurisdiction, the involvement of the police was requested by the Master of the vessel due to the severity of the incident. Both men, Philippino nationals, are now being questioned. The cause of the fight is not known. The 1995-built Panamanian-registered vessel was unladen at the time, and heading into the North Sea to await employment. According to the UK Maritime & Coast Guard the ship's safety was never in any danger. (Oct. 10)

The Panamanian bulker M/V Ocean Wave, ran aground & developed a crack on its bottom near Bangladesh's southwestern port of Mongla. It was carrying 14,500 tons of imported cement. (Oct. 10)

The Russian replenishment tanker M/T PECHENGA (8,499 gross) sustained main engine damage in the Sea of Okhotsk Oct 7. Taken in tow by salvage tug Atlas same day bound Aniva Bay, Sakhalin Island, where ETA about Oct 9. (Oct. 9)

The crew of the 35,000 dwt bulk carrier M/V Aspidoforos successfully beat off two pirate speedboats in the Straits of Hormuz at the entrance to the Persian Gulf, it was reported last week. The general alarm was sounded on board the 1982-built Bahamas-registered vessel when it became clear that the occupants of the boats were trying to board. The crew was put on alert, fire hoses were prepared and the vessel undertook evasive maneuvers. After ten minutes the pirates broke off their pursuit.

The Liberian motor ore carrier M/V WESER ORE, 134,366 gt, bound Taranto with full cargo of iron ore, ran aground in Tubarao at 0015, Oct 4. Vessel has flooding damage. Vessel, which still aground, has a slight port list due to ingress of water in ballast tanks. Considering off-loading part cargo. (Oct. 6)

The Cyprus M/V PHOENIX II, 1,934 gt, Safi for United Kingdom, sent a DSC alert at 1724, UTC, Oct 3, indicating she was in distress and abandoning ship in lat 33 29N, long 09 25W. M/V Juan J.Sister proceeded & rescued all 9 crew about 1900, UTC. Vessel understood to have sunk in lat 33 29N, long 09 25W, about 1930, UTC (October 5)

Italian bulk carrier M/V BULKIGNAZIO ((73,116 gt, built 1990), Hampton Roads for Antwerp, contacted Berendrecht lock while entering the lock on Oct 3. Vessel sustained 20-meter crack above the waterline & also slight damage to starboard side. Vessel will berth for survey. (Oct. 3)

An explosion aboard an LPG tanker M/T Mundogas Europe docked at Subic Shipyard in the Philippines killed at least 5 people. A shipyard statement said the vessel was being prepared for undocking when an explosion occurred in a cargo tank. The 1968, 17,699 dwt ship was sold to Olympi of Chile for US$4M last month. (Oct. 4)

The Philippines M/V OCEAN SAMPAGUITA (5,484 gross) dragged anchor during Typhoon "Bart" and grounded off Hesaki Sep 24. Refloated and towed to Shinkasado Sep 28 for repairs to damaged bottom plating and propeller. (Oct. 1)

The Panamanian m bulk carrier M/V HYUNDAI SPIRIT (68,093 gross), Newcastle, Australia, for South Korea with coal, broke her moorings during discharge and grounded at "Boryung," west coast of Korea, Sep 28. Engine-room reported flooded and some oily residue spilled. Owners/Underwriters arranging salvage. (Sept. 30)

The Malaysian m tanker M/T PETRO STELLA (3,022 gross) caught fire at Port Dickson on Sep 27. The fire is under control. (Sept. 29)

Bahamian passenger vessel M/V NORWEGIAN SKY (78,200 gt, built 1999) grounded near Tadoussac in lat 48 05N, long 69 33W, on Sep 24. Vessel, carrying around 2,000 passengers on 10-day cruise from Quebec City to Newfoundland and Maine, refloated same day and proceeded to anchorage for diver inspection. (Sept. 27)

The German container vessel M/V PUNJAB SENATOR (53,324 gross) and the German ro-ro ferry JOCHEN STEFFEN (5,293 gross) were in collision off Brunsbuttel Sep 21. Both vessels sustained slight damage but were able to proceed. (Sept. 24)

The Panama-flagged general cargo vessel M/V EASTERN HOPE (2,818 gt), Noro for Xingang with about 4,000 cubic meters of round logs, was abandoned by her crew after listing heavily following shifting of on-deck cargo in lat 21 52N, long 134 20E, on Sep 13. Vessel was subsequently reached by a tug, which towed her into Hiroshima on Sept. 22. (Sept. 23)

The Cyprus M/V SELNES (3,658 gross), bound Wismar with stone, grounded in lat 54 56N, long 11 00E, Sep 20. She refloated with tug assistance, after some cargo lightered off, Sep 21. No leakage or pollution. Now anchored to reload cargo, after which she will resume passage. (Sept. 21)

The Sierra Leone tanker M/T WORLD KINSHIP (49,827 gross), loaded with crude oil, is delayed at Dar es Salaam due to a defective single buoy mooring. The SBM is being replaced. (Sept. 18)

NOTE: The historic dangers of carriage by sea continue to be quite real. Sh ippers must be encouraged to purchase high quality marine cargo insurance from their freight forwarder or customs broker. It's dangerous out there.

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 ...............

U.S. Dept. of transportation ......... 1999 Int'l Civil Aviation Y2K Review. 

Investigative Tools - Personal Documents - Russia .............. as personal Documents are traditionally very important for every person who was born and raised in Russia. This article examines what you need to know about these documents when investigating insurance fraud. 

Wallenius Wilhelmsen Merger Website 

The Port of Portsmouth UK Newspaper ........... excellent arrivals & sailings web page including South Hampton. 

The American Sail Training Association (ASTA) Annual Conference ......to be held on November 4/3/5 in Boston, MA. 

Compare Liner Services Rates 

Maritime Science Site ....... looks good, but we are not yet sure what it does. 

ACS Logistics ......... the newly redesigned Web site. 

Ferguson Shipbuilding ............. on the River Clyde. The new site celebrates a recent launch of M/V Stirling Lona. 

Freightgate Marketplace ......... connect shippers, 3rd-party logistics providers & carriers in a unique environment. Shippers submit conditional buying offers, from which carriers view an aggregated list of offers by trade lane, and have the option for acceptance or denial. 

Hyundai Merchant Marine ....... the new site. 

Water To The World .... they will bring it. 

The Seaport Group ........... port consultants. 

Web Radio ....... the complete directory of stations broadcasting on the web. 

Hire.com .......... employment on line. 

Web Position Gold ......... Web site positioning software. Free trial. 

OUR "E" Section: The Forwarder/Broker World

7. Int'l Forwarders Go 'Code Red' in Japan

-- by Stephen O'Connell of SOS Global Express for The Cargo Letter

October 2, 1999 - New York -- The International Freight Association's (IFA) 14th Annual General Meeting was held this past week in Tokyo. Proceedings were not "as usual."

Members from over thirty countries convened the 1st day at the Tokyo Prince Hotel in downtown Tokyo. The agenda included expansion of EDI facilities among the members (Logitrac) and the establishment of a fiscal guarantee system to protect the receivables of participating members.

Chairman Jim Cullen of JSI Shipping from San Francisco says "the AGM is not only a place where we look to continually improve and add value to the association but, more importantly, where our members can meet face to face every year. These meetings foster long lasting business relationships and even longer lasting friendships..."

These friendships were put to a test on Thurs. evening & throughout Fri. At 0200 on Fri. (local time Tokyo), Lili Niv of Lapid Forwarding Tel Aviv received a call in her room from her office in Israel stating that news reports were beginning to come out about a 'major nuclear accident, Japan's worst in history' which had apparently happened only 100 kilometers north of our hotel in Tokyo 14 hours prior. Reports were still sketchy but it was clear that this incident was very serious and still not under control. CNN* reports stated that there was an "uncontrolled nuclear reaction" still happening and that the Japanese Government was urgently calling for international assistance.

Sufficiently concerned at this point, members of the IFA board of directors together with the Japanese IFA partner, Hitoshi Yoshino of MSL Ltd, came together to develop a plan. Within an hour, with news reports getting more dire, it was decided that all members were to be awoken and advised of plans to evacuate from Tokyo. Calls were put out for possible charter options from Tokyo's Haneda airport, but it was quickly decided that the best course of action would be to have all members evacuate by train to a city far enough away from Tokyo as to get all away from immediate danger.

At 0400 all members came together in the hotel lobby, packed with just an overnight bag, and taxis were arranged to Tokyo's Central Station. Upon arriving at the station, money was pooled by everyone to purchase tickets for a 0600 departure to Osaka on Japan's version of the 'bullet' train. Board of Directors member Martin Nolan, of TQ Express - Manchester, said "we worked to get everyone out as quickly as possible with priority given to women and members traveling with children." All members did finally make it onboard the 0600 departure with only minutes to spare.

By 0830 everyone was safely in Osaka, waiting for news updates of whether Tokyo was to be affected. Some arranged flights directly home on Friday from Osaka's Kansai airport. At 1300, reports from Japan's and international news services stated that the nuclear accident was under control and that a major disaster had been averted. Slowly, members of the IFA who had not flown home directly from Osaka, assembled again for the 2.5 hour trip back to Tokyo. A tremendous sense of relief was felt by all, and then all gave in to the exhaustion brought on by lack of sleep and the tense situation.

That evening, back at the Tokyo Prince Hotel, everyone agreed that although we had missed our last day of meeting we had all shared a far greater experience. The calmness and quickness with which the evacuation was orchestrated proved that the IFA was truly a family. The nuclear hazard was contained as reported in detail by the world press, selflessness of action by all members has brought the IFA closer together more than just a meeting ever could have.

The IFA is planning it's 15th AGM in Europe/Africa next Sept. and everyone is looking forward to an incident free meeting with new & old friends alike.

ED NOTE: The IFA is a nonprofit association registered in NSW, Australia, founded in 1985 to help small and medium sized air & sea forwarders compete with multinational freight forwarders. The IFA has developed a proprietary EDI system for tracking and communication. If you are an Int'l agent and wish to consider membership in this organization, please contact the author or the IFA Secretariat. Carriers and vendors are also invited to apply for associate member status.
soconnell@sosglobal.com
http://www.ifa-online.com

8. Mass Arrest of Customs Officials

• Biggest Scandal In China
• Some Officials Flee

Compiled From The China News Digest By Warren Levine For The Cargo Letter

CND, 10 Oct. 1999 -- The central government has replaced all customs officials in charge of customs check points in Shantou city of Guangdong province, including the chief, with officials from Beijing, the Hong Kong Standard reported on Saturday.

In an attempt to break the largest smuggling scandal in China, LIU Liman, Deputy Director of the Discipline Inspection Commission, ordered the replacement of local customs officials. The government has detained about a hundred officials in Shantou in connection with the smuggling case, which involves tens of billions of yuan.

The ring was detected when the son of a senior official revealed information under detention. As a result, the deputy party chief and vice-mayor of Xiamen city of Fujian province, were taken into police custody. The two were allegedly involved in the smuggling activities of the Huayuan Company.

Huayuan, a company that monopolizes oil products in the province, had an allegedly close relationship with Xiamen municipal officials as well as the military. The company also used equipment from the provincial petroleum company for its smuggling. As a result, CHEN Yanxin, general manager of Fujian's petroleum company, was also arrested.

The chief executive of Huayuan was believed to have escaped from the country with the help of ZHUANG Rushun, former police chief of Fuzhou, who was also arrested. (ZHOU Haosheng, WU Yiyi)

9. Last Farewell To Tall Ships

-- By Gillian Black, Livesights, to The Cargo Letter

LONDON - 6 Oct. -- Two tall ships, the STS Sir Winston Churchill & the STS Malcolm Miller, visited London on a bitter-sweet visit: their joint passage through Tower Bridge marks their last voyage together before the Malcolm Miller was decommissioned. Their arrival & departure was carried live online by the ThamesCam: Livesights' online video camera webcasting continuous images from the Thames at Tower Bridge. http://www.livesights.com

The ships, both 3-masted topsail schooners, are operated by the Sail Training Assn. charity, which arranges sea experience for young people aged 16 to 24. The young crews manned the vessels' yardarms as they passed in through the Bridge with a Thames river police escort on Sept. 29, and a fireboat directed a jet of water high in the air in salute as they left on October 6. Among dignitaries aboard STS Sir Winston Churchill for the inbound voyage was the STA president and round-the-world yachtsman Sir Robin Knox-Johnston.

Full details of the event, with interactive links, can be found online. http://www.livesights.com/VideoPages/showcas2.htm

The Sail Training Association uses its funds to make the sailing opportunities available to everyone, regardless of their background, creed or nationality. The STA also organizes the annual Cutty Sark Tall Ships Race invo lving the world's large sailing vessels and their young crews; and for the year 2000, there's a special millennium race which involves a circumnavigation of the North Atlantic.

Aboard each ship for the voyage up the Thames was a crew of 55, all but 10 of whom are young people. They're completing an 11-day sail training voyage of about 1,000 miles. The crew members came from all over Britain, but among them are 14 from various parts of London.

10. Top 10 Ways Columbus' Crew Passed The Time During Their Two-Month Voyage

With thanks to CBS and the David Letterman Show of 11 Oct. 1999:

10. Testing equipment to make sure it was Y1.5K compliant.
 9. Complaining about how they don't get Columbus Day off.
 8. Pretending to enjoy Columbus' weird alter ego "Chris Gaines."
 7. "Polishing the telescope."
 6. "Pumping the bilge."
 5. "Placing all hands on deck."
 4. "Buffing the scrimshaw."
 3. "Oiling the bow thruster."
 2. "Shaking hands with the first mate."
 1. "Baiting the mast."

Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News, Lloyds & other world sources. [an error occurred while processing this directive]