The Cargo Letter

THE CARGO LETTER [371]
Air & Ocean Logistics - Customs Broker News
20 November 2001

Good Tuesday 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." Happy Thanksgiving to you & your staff! God Bless America as the war against terrorism continues.

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

INDEX to The Cargo Letter:

Section A: Section: Trade, Financial & Inland News|
Section B: FF World Air News |
Section C: FF World Ocean News | Section D: FF in Cyberspace |
Section E: The Forwarder Broker World

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

Freight Forwarder Trade Briefs

• U.S. Goes Up ........ as boosted by new technology advances, labor productivity in the U.S. between 1995 & 2000 increased by an average 2.6%, up from 0.8% between 1990-1995, and outpaced the European Union & Japan, according to a report by the Int'l labor Organization. But these steady gains, warns the ILO, could be derailed or reversed in the short term by the shock of the Sept. 11 events.
• Hong Kong Goes Down ........ as total exports & imports of goods both fell significantly in Sept. 2001 over a year earlier, according to figures released by Hong Kong's Census & Statistics Dept. The value of total exports of goods (comprising re-exports & domestic exports) for Sept. decreased by 11.0% over a year earlier to US$17.3B, after a 9.1% year-on-year decline in Aug. Within this total, the value of re-exports fell by 9.5% to US$15.6B, while the value of domestic exports plunged by 22.6% to US$1.7B. The value of imports of goods also declined markedly over a year earlier, by 9.0% to US$18.3B in Sept. after a 9.3% fall in Aug. A visible trade deficit of US$1.0B , equivalent to 5.5% of the value of imports of goods, was suffered in Sept. 2001.
• Iraq & Lebanon Go Free ........ as they will sign a free trade agreement in a bid to further promote bilateral trade relations. The agreement will be signed during the upcoming Baghdad Int'l Fair, Iraqi Trade Minister Mohammad Mehdi Salah was quoted as saying.
• China First? ........ as the relationship between the U.S. & China is the most important bilateral relationship in the coming century as it regards a peaceful & prosperous world, former U.S. president George H.W. Bush said Nov. 8. "I know & confidently tell you that China is vastly important to America," he said in a keynote speech to participants of the 12th World Productivity Congress held in Hong Kong. China's trade climbed 7.9% year-on-year for the 1st 10 months of 2001, taking a dip of just 0.1% after the terrorists attacks in the U.S. on Sept. 11.
• China & Japan Cozy ........ as trade between them reached US$43.6B in 1st half of 2001 -- an increase of 12.7% on last year, a record which may hit US$90B for the year.
• Wood War Smokes ........ as the U.S. has slapped a 12% to 13% tariff on Canadian softwood lumber in addition to the 19% countervailing duty imposed in Aug. -- Canada not pleased. Following U.S. opposition, the Dispute Settlement Body (DSB) at its meeting on 5 Nov. rejected Canada's request to establish a WTO dispute settlement panel to examine U.S. countervailing duties imposed in the context of the ongoing U.S.-Canada softwood lumber dispute.
• Time To Help Pakistani Textiles? ........ as the Pakistan Textile & Apparel Group, a coalition of Pakistan exporters in textiles & apparel, has urged the U.S. Congress to pass the "Pakistan Emergency Economic Development & Trade Support Act," as quickly as possible. The legislation was designed by Sen. Sam Brownback, R-Kan., to avert an economic disaster to Pakistan's economy by providing President Bush with the authority to reduce or suspend existing duties on textile & apparel imports from Pakistan. Although shipment of goods has continued uninterrupted since the U.S. bombing began in Afghanistan began, many American buyers have all but stopped doing business with Pakistan & failed to place new orders for the upcoming 2002 season. Dramatic decline in orders from the U.S. has already resulted in the layoff of thousands of workers, & factory closings are anticipated in Dec. & Jan. Many buyers, including those representing major U.S. apparel brands, are still taking a "wait & see" attitude regarding future orders with Pakistani manufacturers. The U.S. is Pakistan's single largest customer, importing US$2.2B worth of Pakistani goods last year, with clothing & textiles accounting for 86%. Pakistan's textile industry employs 60% of the country's industrial work force. High stakes for Pakistan.
• But How To Help Pakistani Textiles? ........ as U.S. domestic textile producers have told the Bush administration the elimination of duties on Pakistani textile imports would further erode the U.S. textile industry. Charles Hayes, president of the American Textile Manufacturing Institute said, "Eliminating duties will depress prices still further & dramatically increase imports. Our estimates show the damage to the U.S. textile industry could reach billions of dollars." The group said it understood the need to keep Pakistan's textile & apparel industry alive during the war in Afghanistan. While it competes with the major retail importers, ATMI backs the increase of imports at the current duty rate.
• Customs Commish Returns ........ as former New York police commissioner Raymond Kelly will again head the New York Police Dept. -- the nation's largest police force. He takes over Jan. 1. Kelly currently serves as head of global security for Bear Stearns. He was Commissioner of the U.S. Customs Service from 1998 to 2000.
• U.S. Customs Pay Up ........ as it has set Jan. 18 as the deadline for annual user fees on each Customs broker permit & national permit held by an individual, partnership, association or corporation. The US$125 fee that users pay each calendar year for their permit, is set forth in the Customs Regulations in section 111.96 (19 CFR 111.96). Customs Regs. provide that the fee is payable for each calendar year in each broker district where the broker was issued a permit to do business by the due date which is published in the Federal Register annually.
• Mad Greek ........ as the U.S. Dept. of Agriculture's Animal & Plant Health Inspection Service said it will continue its ban of meat imports from Greece after a case of bovine spongiform encephalopathy was found in a cow on July 2. BSE, or "mad cow" disease, is a neurological disease of cattle and is not known to exist in the U.S. Meanwhile, the U.S. Dept. of Agriculture has added France & Ireland to its list of countries considered to be free of rinderpest & foot-and-mouth disease. However, these countries are still subject to certain import restrictions on meat & animal products because of their proximity to or trading relationships with regions affected by the diseases.
• Put It On The Rail ........ as the Int'l Federation of Freight Forwarders Associations (FIATA) & the Int'l Union of Combined Road-Rail Transport Companies have issued a joint declaration calling for the development of a better combined road-rail transport system, with the full liberalization of Europe's railways. The declaration states that: "According to recent prognoses, transport of goods is expected to rise in Western & Central Europe by a further 38% between 1998 & 2010," pointing out that 66% of inland transport is currently moved by road. More attention should be aimed at reducing this share & developing other modes of transportation, such as rail. The freight forwarding industry, however, deems the current performance of railways below acceptable levels. Border crossing speeds need to be increased & full liberalization achieved to improve competition levels, the declaration states.
• China Rails Privatize ........ as domestic railway cargo transportation will gradually be opening up to foreign investors, according to the China Daily. Plan is in line with China's promise to open up its markets to foreign companies after it becomes a WTO member. The Ministry of Railways, which has held tight control for the past 50 years, will let go of its monopoly in stages over the next 5 years. In the 1st stage, from 2002 to 2003, foreign companies will be allowed to form joint ventures with Chinese companies holding majority stakes. From 2004 to 2006, foreign companies will be allowed to hold major shares in rail cargo transport joint ventures and, finally, in 2006 the market will be open for foreign companies to compete evenly. Transportation of passengers will remain under state control.
• Reunion ........ as United Transportation Union members voted by a 6-to-1 margin to approve a merger with the Brotherhood of Locomotive Engineers -- as certified on Oct. 29 by the American Arbitration Assn., which counted the votes.
• Big Beijing ........ as the proposed "Beijing Logistics Port" is expected to be built at a cost of US$1.33B with Beijing Jingtai Logistics & the Kerry Group of Hong Kong being the key investors -- other include Beijing's Huayuan Enterprises Group & Hongshi Industry Co. Ltd. The port will cover 3 million square meters in eastern Beijing's Shibalidian district, close to the Beijing-Tianjin-Tanguu expressway. Analysts believe the new logistics port will help northern China keep in touch with investment & economic developments in the south of the country. Port is expected to be operational in 2006.
• Questing For Geo ........ as Questor Partners Fund II L.P. has purchased US$67.5M of newly issued participating preferred stock in GeoLogistics Corp., the non-asset-based North American logistics provider. In addition to funding operational enhancements, proceeds from the Questor investment will be utilized to pay down bank debt. Questor will have 5 seats on the 10-member GeoLogistics board.
• Danzas In Austria ........ as the logistics arm of Deutsche Post, announced takeover of the Cargoplan/Cargoline group, a freight forwarding & logistics company based in Vienna, Austria, with sales of US$70M in 2000 & 500 employees.
• Phoenix Int'l Grows In Ireland ........ as it has opened a new office in Shannon, marking the 2nd branch in Ireland, following the opening of Dublin in June, 1999. Phoenix belives Ireland to be an overlooked market.
• U.S. Customs To Split ........ as it has proposed new rules that would allow importers to submit a single entry to cover multiple portions of a single shipment which has been split by the carrier & arrives separately in the U.S. While split shipments can be found in the ocean & land transport environments, it has historically been a problem in the air transport industry. Split shipments often occur as a result of limited space, the need to balance weight, and offloading concerns of planes. Proposed single entry for split shipments is permitted under the Tariff Suspension & Trade Act of 2000 -- which would work as follows: 1.] A shipment is delivered & accepted intact by the carrier in the export country under a single bill of lading or waybill to be shipped in its entirety; 2.] The shipment is split by the carrier, acting on its own; 3.] The split portions of the shipment remain consigned to the same importer in the U.S., which is named on the original B/L or waybill; and 4.] Those portions of the split shipment that could be cov ered under the entry arrive directly from abroad at the same port of entry in the U.S. within 10 calendar days of the date that 1st portions arrived. Customs will take comments through Jan. 15, 2002. Contact Keith Fleming, Office of Field Operations, at 202-927-1049.
• KPMG Buys Fuglei ........ as the national accountancy firm has expanded the service offerings of its "Trade & Customs" practice by acquiring "CUSTOMS Info", the popular customs reference information CD-ROM & Web site, from Fuglei & Associates. CUSTOMS Info is marketed to more than 800 subscribers & 3,000 licensed users, including importers, exporters, customs brokers & attorneys.
  www.customsinfo.com.
• New "ExportView" ........ as Flagship Customs Services new system allows its export clients to view online their shipper's export declaration filed with U.S. Customs. ExportView gives shippers access to FCS' Export2000 Service to view & print SEDs submitted by the filer on their behalf. Thus, the shipper is able to gain "instant access" at any time to its SED data filed & accepted by Customs.
• Arzoon Unites ........ as it has released "Arzoon LIFE 4.0" software, a solution that unifies transportation management and international trade logistics on a single platform. The application is part of a category of supply chain execution software called "logistics resource management" (LRM). The Arzoon LIFE LRM platforms provides enterprise & supply chain-wide visibility & control of logistics processes from the procurement of raw materials to the distribution of finished goods.
  www.arzoon.com.
• Clicklogistics Refuels ........ as the provider of technology & management services has secured an additional round of venture capital, amounting to "a 7 figure sum," with GTCR Golder Rauner Fund VII. The provider, based in Boston, "has demonstrated an ability to attract customers in a tough economy," said Dave Donnini, a principal at GTCR. Clicklogistics has recently signed Marathon Oil, Krispy Kreme, & Alcoa as clients.
• Others Consolidate ........ as Digital Freight, a provider of Net-native transportation management tools & Cleartrack Information Network, Inc., a supply chain event management firm, have announced a strategic partnership to provide an online comprehensive solution for transportation procurement, freight management & visibility from users' desktops. The Digital Freight-Cleartrack combined solution will allow global shippers to effectively manage the transportation procurement bidding process & monitor shipments from end-to-end while providing proactive event & alert notifications throughout the shipment's cycle.
  www.digitalfreight.com.
• And Others Consolidate ........ as Freightquote.com & Unishippers have announced an alliance which will enable Unishippers' 300+ franchises & 200,000 customers to compare discounted rates & transit times of numerous carriers. "InstaShip" will offer truckload, LTL & other heavy freight services electronically. The alliance will add freightquote.com's freight rating, scheduling & tracking technology to Unishippers' air express online service offerings. The shake out continues.
  www.unishippers.com.
• Weeded Out ........ as Mexican marijuana growers are having a tough time this year, as U.S. agents searching for terrorists find illegal drugs instead. Heightened border security since Sept. 11 has led to increases in the number of drug seizures by U.S. agents over the past month, raising the total between Sept. 24 to Oct. 25 from 198 in 2000 to 265 -- a 34% increase, according to U.S. Customs figures for Texas, New Mexico & Arizona. Customs agents in the 3 border states confiscated 25,045 pounds (11,360 kg) of marijuana from Sept. 24 to Oct. 25, figures show. Figures for California were not available.
• Historic Seizure ........ as U.S. Customs seized US$100M worth in counterfeit Microsoft computer software in Los Angeles & arrested 3 individuals on Nov. 17. Customs seized a 40-foot container of counterfeit computer software & 2 X 40-foot containers containing 85,000 cartons of counterfeit Marlboro cigarettes valued at about US$3M. Customs in another search of a related storage unit in La Puente, Calif., found more than 47,000 copies of counterfeit Microsoft & Symantec software and 21 cartons of counterfeit end user license agreements, manuals, barcodes, labels & registration cards. The copies of Windows Millenium & Windows 2000 Professional were indistinguishable from the real thing except for their lack of authenticating holograms on the CDs, flaws in packaging & other slight defects. Scary! Largest seizure of pirated software in Custom's history.
• Tried To Wing It With Customs ........ as a man is accused of smuggling 44 birds, including Cuban finches popular as pet songbirds, by strapping them to his body for a charter flight from Havana. Carlos Rodriguez Avila of Miami was released Nov. 2 on US$50,000 bond after he was charged with lying on a customs declaration by denying he was bringing any wildlife into the U.S. Suspicious airport inspectors thought Rodriquez a bit "flightly" and asked that he raise his pant legs & saw something strapped to his legs when he arrived in Miami. A final count of 44 birds included some Cuban melodious finches -- a species not endangered in its home range but easily stressed by capture & smuggling. Cuban finches are popular as pets for their singing & could easily be sold as pets in South Florida. An Int'l treaty requires an export permit to remove the birds from Cuba, & U.S. regulations requires quarantine on arrival to check for disease. Males have black faces nearly surrounded by a bright yellow band. The rest of the body is yellow-green, black & gray. Adults are about 4 inches long.