The Cargo Letter

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Air & Ocean Logistics - Customs Broker News
30 April 2003

Part 1 of 1

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." Be sure to study our Special Feature in "D" Section: FF in Cyberspace -- for the SARS epidemic. A repeat of 1918? Not likely, but what will be the final impact of SARS on world trade & transport? -- Here's what happened in April 2003.


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


NOTE:  The Cargo Letter is designed to be read using a 12 point Geneva font on a standard 6 inch e-mail filed.  Our TECHNICOLOR edition requires AOL v3.0 or better.


INDEX to The Cargo Letter:

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

1. Freight Forwarder Trade Briefs ______________                            

2. The Cargo Letter Financial Page ______________                               

OUR "B" Section:  FF World Ocean 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. New U.S. Transport Related Legal Cases ________            



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

  1. Freight Forwarder Trade Briefs _____________ 


***Global SARS Trade Warning ....... as trade in volume terms is forecast to increase by less than 3% in 2003, the World Trade Organization predicted last week. But the WTO warned the estimates were marked by downside risks due to the continued sluggishness of the world economy & the effects of the outbreak of severe acute respiratory syndrome (SARS).

U.S. Customs officials were scheduled to begin implementing the Container Security Initiative (CSI) program in Hong Kong in April, but delayed their trip as a result of the severe acute respiratory syndrome (SARS) outbreak gripping the territory.

The outbreak of SARS has been blamed for battering Hong Kong's tourism & catering industries, amongst others, since the outbreak began, but the territory's ocean logistics industry has hardly been affected, the head of the Hong Kong Logistics Counsel (Logscouncil) said during the group's meeting on April 24 -- but airfreight is another matter.

Cancellation of passenger flights in/out of Hong Kong as a result of the SARS outbreak is greatly affecting Hong Kong's air freight industry, according to the Hong Kong Assn. of Freight Forwarding & Logistics Ltd (HAFFA). In recent days 37% of flights had been canceled & passenger throughput was down by more than 60%. HAFFA, said: "Since over 50% of the export cargoes are transported via the belly of passenger flights out of Hong Kong, the cancellation of over 30% of all passenger flights is affecting the normal operation of the industry. Freight forwarders have to consider using other regional airports, in particular on the intra-Asian routes." The problem is acute for manufacturers throughout the Pearl River Delta region as the cancellation of such a large number of flights is disrupting their shipping schedules. HAFFA has appealed to both the government & the airlines to work with Hong Kong's freight & logistics industry to search for a solution to the situation.

The Hong Kong Air Cargo Terminal (HKACT) starting 1 May 2003 will implement a 50% cut in office rents for a period of 3 months due to the slowdown in traffic from the outbreak of SARS.

Trade growth in Hong Kong will be limited to under 4% in 2003 due to the outbreak of SARS, the Hong Kong Trade Development Council (HKTDC) said recently. A major slowdown in the export sector, however, can be avoided if the disease is contained in a few months, the government's chief economist said.

Taiwan said on April 27 it would bar visitors from hot spots China, Hong Kong, Singapore & Canada, as the island reported its 1st death from the disease. The next phase of this has begun.

In 1918 there was a similar virus outbreak. Before the year was over, America would be ravaged by a flu epidemic that killed 675,000 -- more than in all the wars of the century combined -- before disappearing as mysteriously as it began. The death toll was 70 million worldwide. Could 1918 influenza pandemic repeat itself? Not very likely. Even now the World Health Organization (WHO) reports that new SARS cases in the affected areas appear to be in decline, except China. Indeed, the WHO has just removed the "Traveler Advisory" for Vietnam & Toronto.

SEE OUR SPECIAL "SARS" REPORTS IN "D" Section:  FF in Cyberspace, below.

***Spain Says No To SARS ....... as it's customs authorities now require an official certificate of disinfection for cargo coming from Hong Kong, Singapore, Taiwan, mainland China & Toronto, Canada. Spanish authorities said shipments arriving without official documentation from the sanitation departments of SARS affected places will not be allowed into the country & could be destroyed. The move targets textiles, used garments, rags, scrap twine, cordage, & rope named under customs tariffs 63.19 & 63.10. And as a preventative measure, cargo will be fumigated on arrival at Spanish ports -- likely not to include passengers.

***Hong Kong Exports Up Regardless ........ as since early April, cargo handled has decreased on a weekly basis due to the current medical situation. However, total tonnage throughput in the 1st quarter was 448,670 tons, representing a 10.1% growth compared with the same period last year. Exports to Asian countries recorded moderate growth of 2.6%, with the Japanese market having declined by 3% for the quarter. Europe contributed the lion's share at 25.5%, while the U.S. showed an increase of 18.9% during the month period. Aggregate export volume recorded in the 1st quarter was 232,309 tons, up 13% compared with same period last year.

***Singapore Trade Keeps Pace ....... as total trade expanded 12.2% in March year-on-year to US$22.6Bn, after a 14.6% growth the previous month.

***U.S. Trade Sluggish ....... as the economy expanded at an annual rate of 1.6% in the 1st quarter of 2003, the Commerce Dept. reported last week, which was significantly weaker than analysts had predicted. Analysts were expecting the economy to grow at an annual rate of 2.4% for the quarter. The gross domestic product, which is the total value of all the goods & services produced in the U.S., grew at 1.4% pace in the 4th quarter of 2002.

***2001 - A Heavy Year ........ as the U.S. Bureau of Transportation Statistics states that its new publication, titled "U.S. Int'l Trade & Freight Transportation Trends," shows that more than 10% of the 16 billion tons of freight moved on the U.S. transportation system is Int'l freight. The largest percentage of U.S. Int'l trade (78% by tonnage & 38% by value) moved in the maritime sector in 2001.

***Another 24 Hours? ....... as Canada's Customs & Revenue Agency (CCRA) is to impose a 24-hour advance cargo notification scheme for marine cargo importation starting next year. The 24-hour advance notification represents the time frame by which ocean carriers & freight forwarders will be required to submit data to customs electronically before loading in foreign ports. Data will be processed through automated targeting systems, & based on risk assessment. The CCRA will also identify certain containers for examination prior to loading. The 24-hour rule will be implemented by April 2004

***New 3PL Face? ........ as the 3rd party logistics (3PL) industry is undergoing a huge transition. Currently competing in a highly fragmented, high growth market, 3PL providers will soon be swept up in a massive wave of consolidations. This trend will be driven by 3 factors: the increased demand for lead logistics providers, the emergence of new technology, and an increase in cash-rich buyers seeking logistics targets. Shippers need to start scrutinizing their 3PLs & decide how well these providers are positioned to survive in the new era. Read the whole story in Supply Chain Management Review.

***Bright 3PL Future ........... as 3rd party logistics providers (3PL) & Logistics Service Providers (LSP), are seen by Thomas Craig, President of LTD Management, to have great Int'l and/or domestic logistics opportunities. The continuing growth of supply chain management, outsourcing & globalization plus the dynamic effect of E-Commerce are driving & will drive growth. Read the entire story at Logistics Focus.

***The Dangers of HHG ....... as speakers at this month's American Moving & Storage Association's annual conference at La Quinta, CA said that after Sept. 11, 2001, household goods (HHG) were deemed high risk cargo by the U.S. Customs Service. "If you X-ray a container of pharmaceuticals or toys, it just looks like boxes that are all the same," said Packimpex of Zurich, Switzerland. "But can you imagine how afraid a customs agent is when he sees a household goods shipment, which contains many different things including electronic devices & bottles." But moving industry officials said security has not had a big effect on domestic household goods carriers. >> Speakers at the AMSA conference also mentioned the rates the U.S. military pays movers are a source of strength in an overall soft moving & storage market.

***Can't Pull The Wool Over U.S. Eyes ....... as Applied DNA Sciences, Inc. a provider of proprietary embedded-DNA security solutions, has announced that the U.S. Dept. of Commerce has selected its proprietary embedded-DNA textile marker system as one of 3 technologies as a key solution that may allow for a cost-effective textile "marker" system for practical use by both U.S. textile manufacturers & the Customs Service. In Oct. 2002, as part of the Bush Administration's long-term ongoing effort to address trade challenges facing the U.S. textile industry, the Commerce Dept. secured the expertise of the Oak Ridge National Laboratory to evaluate & select the best process by which to identify & verify whether the components of foreign-made goods were from the U.S. or of foreign origin. U.S. apparel import preference programs require the use of U.S. fabrics & yarns. The origin of fabrics & yarns, however, is difficult to determine, compromising the enforcement of these programs. The ability to identify U.S. textile components with a practical & cost-effective "marker system" would identify illegal textile imports, & authenticate legal textile imports allowed under the apparel import preference programs. The 3 marker system technologies are: (1) Applied DNA Sciences' embedded-DNA; (2) ultraviolet fluorescent marks; & (3) nanobarcodes.

***FedEx Freight ....... as along with sister units FedEx Trade Networks & FedEx Ground, the giant is now offering ocean & ground service from Asia to U.S. locations via a new service called "FedEx Trade Networks Ocean-Ground Distribution Service." The move follows services previously offered by competitor, UPS Supply Chain Solutions, Inc. (formerly Fritz).

***"Kirk To Enterprise ---" ......... as on April 15 UPS unveiled a new generation of the wireless, handheld computer used by its drivers, ultimately ensuring customers have the most up-to-the-minute tracking information available. The 4th generation of the Delivery Information Acquisition Device, or DIAD IV, incorporates new radio communication links that allow it to communicate almost anywhere, anytime; dramatically expanded memory, and a color screen that allows alert messages to be color-coded for drivers. The incorporation of 3 different types of radio communication links in each unit will provide package delivery information almost instantaneously. The color screen will make life easier for drivers as well as customers signing for deliveries. Urgent customer pick-up messages, for example, can be color-coded to alert the driver. And the 128 megabytes of memory -- 20 times that of the DIAD III -- positions UPS to provide future features, like customer preference notes, to enable drivers to personalize service even more. The DIAD IV, for example, features a new link to Global Positioning Satellites that will allow drivers to easily verify customer locations for pickup or delivery of packages, particularly outside the U.S. UPS pioneered the use of handheld computers in the shipping industry in 1991 when it introduced the 1st DIAD. The DIAD IV will be the 1st handheld computer to include built-in wireless connectivity options for either personal, local or wide-area networks. Each DIAD IV will feature a built-in Global Packet Radio Service or Code Division Multiple Access radio (depending on the area of the world in which it is operating); an acoustical modem for dial-up access if necessary, & wireless local area network connectivity (WiFi) to enable transmission within a UPS center. The device also features a Bluetooth wireless personal area network & an infrared port to communicate with peripheral devices & customer personal computers. About 70,000 DIADs are used daily by UPS drivers throughout the world. Wow! Can you hear me now?

***An L/C Alternative? --"UPS Exchange Collect" ...... as a new UPS service is aimed at helping companies accelerate payments & reduce the risks associated with Int'l trade transactions. Under the new system, UPS collects payment from the consignee while the shipment is still in transit. Once delivery is confirmed, UPS deposits the payment in the shipper's designated bank account. The whole process is done online through e-mail & electronic remittance for fastest possible turnaround. "On average, sellers receive payments via UPS Exchange Collect in 10 days or less, said UPS.

***Sleep Walking .... as in the 1st major change in hours-of-service rules in 64 years, the Federal Motor Carrier Safety Administration (FMCSA) has increased the number of off-duty hours for U.S. truckers from 8 to 10. However, it increased the number of hours a driver may spend behind the wheel from 10 to 11 hours -- and a work shift can be as long as 14 hours. The National Sleep Foundation (who knew?) objected to provisions that allow drivers to be assigned nondriving duties, such as loading & unloading trucks, after they have driven for 11 hours. The new rule does not mandate onboard monitoring devices. The FMCSA said this could lower the cost of moving freight by 1% & mean a yearly economic benefit of almost US$100Bn in increased productivity. This rule governs drivers transporting freight in interstate commerce in a property-carrying commercial vehicle with a gross vehicle weight rating of at least 10,001 pounds, & operating vehicles transporting hazardous materials in quantities requiring vehicle placards. Drivers of buses involved in interstate transportation will continue to use the current hours-of-service regulations.

Read More #1

***New Law Would Reflect A Best Practice ......... as a bill introduced into the California legislature this spring pits trucking concerns against shippers, brokers, & steamship lines that arrange their own inland movements of ocean containers. The Intermodal Reform Act (AB 1651) would require any party that contracts for harbor drayage services to verify that the motor carriers they hire comply with state safety & licensing requirements. The bill also would shift liability in the case of accidents or cargo losses involving noncompliant motor carriers onto the contracting shipper, carrier, or broker.

***Keep Your Eyes On The Road ....... as the defense spending act President Bush signed last week directed that the US$20M in truck security grants Congress gave to the Transportation Security Admin. in Feb. should be used to fund the American Trucking Assn.'s "Highway Watch" program. Despite Bush's signing of the bill, TSA spokesman Brian Turmail said it was too early to say for sure if the money would go directly to Highway Watch. ATA officials said they were hopeful TSA would spend the money on Highway Watch & its affiliated program, "America's Trucking Army."

***USF Red Star Inc. the USFreightways Corp. company, has acquired Plymouth Rock Transportation Corp. & will began service to all Plymouth Rock Transportation customers effective April 21, 2003. Based in Stoneham, Mass., Plymouth Rock Transportation provides overnight freight service to 11 Northeastern states from Maine to Virginia. USF Red Star provides LTL (less-than-truckload) service throughout the U.S. & Canada.

***E-Manifests At HKG .......... as Tradelink Electronic Commerce Ltd, a joint venture between the Hong Kong Government (SAR) & other private sector shareholders, has begun accepting electronic cargo manifests from companies in Hong Kong. The government, which owns slightly less that 42% of the electronic commerce services provider, said air, ocean, river & rail mode carriers can now submit cargo manifests through Tradelink to the Hong Kong Customs & Excise Dept., the Census & Statistics Dept. and the Trade & Industry Dept. at one time. Carriers may also use the service to receive detention notices &release vouchers issued by the Customs & Excise Dept. submit import & export statements for dutiable commodities, and reply to queries from the government.

***Pakistan Rolls Forward ........ as the Int'l Chamber of Commerce in Pakistan (ICCP) has selected Orderpro Logistics, a U.S. based transport & logistics software systems provider, to build & manage a national logistics database service for Pakistan -- "Gold." The service will be free of charge to trucking companies that provide discounted rates to Gold shippers. Shippers will pay a 2% for the service, & receive discounted prices from Gold trucking companies. The service will allow trucking companies & shippers to provide their information through various forms of communications including: fax, telephone, & via the Internet.

***NAFTA Rail For NAFTA........ as the Kansas City Southern Railway Company (KCSR), the Texas Mexican Railway Company (Tex-Mex), & TFM, S.A., de C.V. (TFM) under the common control of a single transportation holding company, NAFTA Rail, to be headquartered in Kansas City, Missouri. As part of the transaction, KCS will change its name to NAFTA Rail, which will trade on the New York Stock Exchange. The common control of The Kansas City Southern Railway Company & the Texas Mexican Railway under NAFTA Rail would require approval of the U.S. Surface Transportation Board. Additionally, the acquisition of Grupo TFM shares by NAFTA Rail would require the approval of the Competition Commission & the Foreign Investment Commission in Mexico.

***Big Brown Boutiques Begin Branding Blossom ......... as more than 3,000 Mail Boxes Etc. (MBE) retail locations around the U.S. have begun re-branding to "The UPS Store." The re-branding, scheduled for completion by Sept., will be the largest such effort in retail & franchise history. It was launched in Seattle this month with the opening of the 1st official location under The UPS Store name & look. UPS acquired MBE in 2001.

***Short Circuited ....... as the electric battery powered vehicle is dead. When General Motors charged up its 1st electric-powered vehicle in the late 1980s, it was heralded as the "car of the future." California officials saw it as salvation & made the new technology the centerpiece of their toughest-in-the-nation emissions rules. But now, more than a decade later, the state is retreating from those strict pollution policies, & dozens of GM's electric EV1s are lined up behind a chain-link fence in Van Nuys. The Big Three automakers have all abandoned their electric-battery vehicles & are focusing instead on low-polluting hybrids & other technology. GM said it is taking back the remaining 375 of its 1,000 pioneering EV1s as their leases expire because it can't supply parts to repair them. Some will end up in museums or research labs. Others will be used for spare parts, batteries not included.

***"Take The High Road!" .......... as John Sequeira, former Director of Risk Management at Fritz/UPS & James Myers have formed "Take The High Road" to change corporate behavior & attitudes. The traing company is not about compliance or corporate governance, but about having persons do the right thing -- because it is the right thing. The company says it conducts surverys & gives presentations and workshops on improving ethics, honesty & integrity in the business world. The speakers from Take The HIgh Road represent over 150 years of business experience. "It is a fact that companies committed and programed to ethical and honest business practices do better financially & have significantly greater representation among the 100 top financial performers than companies that do not emphasize ethics a key component of management," the company said.

***Iraqi Treasure? ........ as members of the news media & U.S. soldiers are being investigated for shipping art, artifacts, weapons & cash from Iraq, with criminal charges already brought in one case. At least 15 paintings, gold-plated firearms, ornamental knives, Iraqi government bonds & other items have been seized at airports in Washington, Boston & London, according to the bureaus of Customs & Border Protection and of Immigration & Customs Enforcement. None of the items displayed at a news conference were priceless antiquities looted from Iraqi museums. Still, Customs & military officials stressed there will be no tolerance for American service personnel or civilians bringing Iraqi souvenirs or war trophies back to the U.S. So far, only Benjamin James Johnson, who worked as an engineer for Fox News Channel, has been charged. But officials said more more seizures of stolen items are expected in what is being dubbed "Operation Iraqi Heritage." The Cargo Letter thinks there is a big difference between the battlefield souvenirs that our fathers & grandfathers brought home from the wars over the last 100 years -- and the wrongful looting of museums. Let's hope our U.S. Justice Dept. can take a breath, & see the difference.


  2. The Cargo Letter Financial Page ______ 

**Alaska Air Group. DOWN with a 1st quarter net loss of US$56.3M, or US$2.12 per share, compared with a net loss of US$85.1M, or US$3.21 per share, during the corresponding quarter in 2002.

**Arkansas Best Corp. (parent of national LTL carrier ABF Freight System) DOWN with a 1st-quarter loss of US$734,000, which included a US$9M refinancing charge.

**Boeing Co. DOWN with a net loss of US$478M for 1st quarter of 2003, 62% better than same period in 2002, on revenues of US$12.3Bn, which was down 11% compared to Q1 in 2002. The Commercial Airplanes division's deliveries of commercial airplanes decreased 35% to 71 airplanes, & revenues fell 31% to US$5.7Bn when compared with 1st quarter of 2002.

**Cargolux Airlines Int'l. UP as operating profit increased by 150% to US$55.7M in 2002, a record, generating an operating margin of 6.9%. Net profit increased by 220% to US$49.3M last year. Ton kilometers flown in 2002 came to 4.157 billion, an increase of 10.3%. Cargolux has decided to cancel its war risk surcharge of EURO.10 per kilo on all shipments, effective April 21.

**C.H. Robinson. UP as net income increased 28.8% to US$26.8M from US$20.8M in 2002.

**CMA CGM. UP with net income in 2002 of EUR47 million (US$51.2M), a 68% rise over 2001's EUR28 million.

**CMB (Belgian maritime group). UP as it's estimated result for 1st quarter of 2003 will be EUR84 million (US$92M), compared to same period last year result of EUR55 million.

**CNF (parent of Menlo Worldwide) DOWN with net income of US$15.9M for 1st quarter of 2003 -- down US$2.4M from 1st quarter 2002.

**Continental Airlines. DOWN with a 1st quarter net loss of US$221M including a previously announced after-tax special charge of US$41M, primarily related to the reduced market value of its MD-80 fleet & spare parts associated with grounded aircraft. Cargo revenue ton miles rose 7.5% in March to 86,205,000 from 80,216,000 during same month 2002.

**CP Ships Ltd. DOWN with a net loss of US$21M after exceptional charges for 1st quarter ended on March 31 -- compares to an US$11M net loss during same quarter in 2002.

**Forward Air Corp. UP as net income increased 10% to US$5.4M compared with US$4.9M in the prior-year quarter. Diluted earnings per share for 1st quarter of 2003 increased 14% to $0.25 compared with $0.22 in the prior-year quarter.

**Int'l Shipholding Corp. UP with net income for 1st quarter 2003 of US$2.994M, compared to a net loss of US$920,000 for same quarter 2002. 

**J. B. Hunt Transport Services, Inc. UP with 1st quarter 2003 net earnings of US$11.2M, or diluted earnings per share of 28 cents, compared with 2002 Q1 earnings of US$4.9M, or 13 cents per diluted share on 8% higher average diluted shares outstanding in the 2003 period.

**Lufthansa Cargo. UP with a pretax profit of US$619.84M for the financial year ended Dec. 31, 2002.  

**Old Dominion Freight Line, Inc. UP with record financial results for 1st quarter ending March 31, 2003. Revenue from operations increased 20.2% to US$152,865,000 from $127,147,000 in Q1 of 2002. Net income rose 89.4% to US$4,247,000 from US$2,242,000 last year. 

**Roadway Corp. UP with Q1 net income of US$8,010,000, or US$0.42 per share (diluted), compared to net loss of US$1,749,000, or US$0.09 per share (diluted), for the 1st quarter of 2002.  

**Samudera Shipping Line (Singapore) UP with a net profit of US$12.6M for 2002, up 79% from US$7M in same period in 2001.

**Sinotrans. UP with a net profit of US$69.1M for the 12 months ended Dec. 31, 2002, up 26.5% from same period in 2001.

**UPS. UP with record-setting profits. For Q1 ended March 31, 2003, revenue totaled US$8.02Bn, up 5.8% from the US$7.58Bn reported in 1st quarter last year. Net income increased 24.4% cent to US$611M compared to 2002's US$491M. Operating profit for the non-package sector, which includes UPS Supply Chain Solutions (formerly Fritz), nearly doubled to US$107M as revenues improved 11.4% to US$693M.

**UPS Supply Chain Solutions. UP as revenue was up 8.7% to US$500M for Q1.

**USA Truck, Inc. DOWN as net earnings decreased to a net loss of US$1,148,303 for 1st quarter of 2003, compared to net income of US$73,853 for same quarter of 2002. 

**U.S. Xpress Enterprises, Inc. UP as operating revenues increased in Q1 to 11.9% to US$220.7M, compared with US$197.2M for 1st quarter of 2002. Net income for 1st quarter was US$121,000, or US$0.01 per diluted share, compared with a loss of US$1.4M, or US$0.10 per diluted share, in 1st quarter of 2002.          

***SAS Put Down ....... as the Scandinavia airline group's credit rating has been downgraded one level to Ba1 by Moody's Investor's Service. The downgrade was based on a decline in demand for air travel because of weak economic growth, the severe acute respiratory syndrome (SARS) outbreak & uncertainty in Iraq, Moody's said. In related news, SAS Group is to cut around 4,000 staff from its Scandinavian Airlines (SA) unit as part of new cost cutting measures.



OUR "B" Section: FF World Air News***

3. Freight Forwarder World Air Briefs __________ 


***Going Postal ......... as the U.S. Postal Service has awarded contracts that will allow it to begin shipping mail on airlines that offer the best service for the lowest price starting June 28. Currently all 54 certified airlines in the U.S. share in carrying the mail, with volume divided evenly among carriers operating over the same route. The post office paid the airlines about US$370M last year to carry the mail. The new system is expected to improve service & cut costs at the same time. Airlines entered bids to carry the mail over various routes, & mail will be sent aboard planes of those that offer the best price. If service slips on a route, however, the mail will be switched to the carrier with the next best price -- or so goes the theory. Contracts cover about 17 million pounds of mail a week, about the same amount the agency ships by FedEx under a separate agreement. 

***Cargo In-Security ....... as currently, less than 1% of shipped cargo is screened worldwide, & even that little for only a few of the identified threats -- explosives, weapons, biological, chemical & radiological/nuclear. Terrorism threats to disrupt western economies, & regulatory changes driven by the U.S., specifying requirements for cargo shipped into the U.S., are expected to bring to dramatic changes in this industry. These findings in a new report include the following:

- The 10 companies currently active in the field of cargo inspection will have to redesign their systems to meet the post 9/11 threats of WMD.

- Just the airline sector handles more than 60 billion tons of cargo per year, growing 9% per year.

- Total cost of added security for airline cargo alone is forecasted to surpass US$2Bn in 2006.

- Present airline insurance costs are US$6Bn per year, 6 times higher than their pre 9/11 levels.  A single cargo terror event will drive these costs even higher (source: IATA) Read the entire Homeland Security Research report.

***Singapore SARS Aid ........... as starting next month it will give some relief to carriers & tenants who use the city state's airports following a large decline in business as a result of the severe acute respiratory syndrome (SARS) outbreak. The measures include a 30% rebate on aircraft landing fees for airlines using both Changi & Seletar airports, and a 10% discount will be given to all tenants at Changi Airport, the Civil Aviation Authority of Singapore (CAAS) said. The measures begin on May 1 and runs through Dec. 31. CAAS said its measures will amount to US$25.33M in savings to the industry.

***Got SARS? ......... as Hong Kong based Cathay Pacific Airways has suspended all passenger flights to/from Malaysia following the Malaysian Government's decision to impose stringent visa requirements on Hong Kong people wishing to travel to the Southeast Asian country, but its 2 scheduled freighter flights continue to operate. The Malaysian Government's decision, which was made in light of the ongoing atypical pneumonia crisis afflicting the world, has severely affected demand for travel, the carrier said. Meanwhile, Continental Airlines joins a number of carriers cutting their Asia routes. It will temporarily suspend all its 5 weekly flights between its New York hub, Newark Liberty Int'l Airport, & Hong Kong due to a dramatic reduction in traffic on the route.

***Who Was That Masked BAX Global? ...... as it urgently air shipped an estimated 500,000 respirator masks to Hong Kong to help fight against the outbreak of the SARS virus. The shipment is one of the largest of its kind known to officials at BAX and O'Mara Products Inc., the company that quickly sourced large quantities of the surgical-style face masks, known as N-95 respirators. "This has been an incredible feat," said Craig Sobczak, president of O'Mara Products, Grandville, Michigan. "To come up with 500,000 masks immediately and get the 1st batch delivered within 48 hours was a monumental achievement," he said. "Finding the masks was one thing, but getting them to Hong Kong as fast as we did is something else. BAX stepped up to the plate & made this happen, it was phenomenal."

***Air America ....... as U.S. commercial airlines have been awarded more than US$1Bn in military contracts since Oct. 2002 as the war in Iraq increased demand for transporting troops, supplies & humanitarian goods to the region. Officials at the U.S. Air Force Air Mobility Command, which oversees airlift services for the Dept. of Defense, said that $1.06Bn was awarded to civilian airlines between Oct. 1 & March 3. Last month, the agency estimated that charter airlift expenditures for fiscal year 2003 would amount to about US$618M. Although Air Mobility Command would not break out the value of individual contracts, companies that routinely provide military airlift services include American, United & cargo carriers such as Atlas Air. More than 30 companies have contracts with the military. In fiscal year 2002, when the U.S. liberated Afghanistan, a total of US$1.38Bn was paid to commercial air carriers.

***DHL Will Jump Up To 3rd Place? ....... as with the "duopoly" of UPS & FedEx firmly in its sights, DHL has agreed to purchase most of Airborne Inc. The deal will catapult the Int'l express company & its parent, Deutsche Post World Net, into the No. 3 slot in the U.S. overnight air market. DHL will pay US$1.05Bn in cash for Airborne, the equivalent of US$21.25 per share. Under the proposed buyout, which needs regulatory approval, DHL would buy Airborne's ground delivery operations. Airborne's air operations will be renamed ABX Air, and remain in the hands of its existing shareholders. U.S. laws prohibit foreign control of domestic airlines. Currently, foreign entities can own no more than 25% of a U.S. air carrier. Legislation introduced by Sen. Ted Stevens, R-Alaska, to the U.S. Senate appropriations bill would require air carriers to be "effectively controlled" by U.S. interests. UPS & FedEx contend the new legislation is needed because the DHL-Airborne deal would skirt current laws. DHL could exert control over Airborne through the service agreement, a UPS spokesman said.

***The Maple Leaf Wilts ....... as Air Canada has filed for protection from its creditors under Canada's Companies' Creditors Arrangement Act (CCAA) -- and concurrently a petition under section 304 of the U.S. Bankruptcy Code. The company said it hopes this will allow it to restructure its balance sheet & costs through savings obtained mainly from aircraft lessors, lenders, bondholders & labor groups. In conjunction with its filing, the company said it has arranged for a US$700M, or an equivalent amount in Canadian dollars not to exceed US$1.05Bn, debtor-in-possession (DIP) secured financing facility from General Electric Capital Canada.

***Shipper's Aid ....... as Lufthansa Cargo said it would reduce its fuel surcharge by 5 euros/cents per kilo to 10 euros/cents, effective May 6. It is the 2nd such reduction since April 7, when Lufthansa reduced the surcharge from 20 euros/cents to 15 euros/cents per kilo. Lufthansa said its decision was based on the continuing decline in crude oil & kerosene prices. Nice trend. Cargolux & Emerates Skycargo have followed the move down from EUR0.20 (US$0.22) to EUR0.15. Carriers implemented the surcharge in accordance with fuel index procedures. The index explained, is based on 5 key spot markets: Rotterdam, Singapore, New York, the U.S. Gulf and the U.S. West Coast, adding these prices are monitored against a fixed base of $0.535 per gallon equal to index 100.

***More Shipper's Aid ...... as Martinair Cargo has joined the trend & axed its war surcharge of EUR0.10 (US$0.11) per kilo of actual weight. The surcharge had applied to the company's Middle East & Asia Pacific routes.

***Singapore Airlines Takes Bows ....... as it was named OAG Airline of the Year 2003 at a glittering ceremony at the Park Lane Hilton, London. The ceremony marked the 21st anniversary of the OAG Awards.

***National Air Evaporates ......... as a federal court has approved the liquidation of bankrupt National Airlines. The move, converting the case from Chapter 11 Bankruptcy to Chapter 7, means that defunct National Airlines can sell its remaining assets to the highest bidder. Las Vegas-based National ceased operations Nov. 6 after spending almost two of its 3 1/2 years in Chapter 11 bankruptcy protection. The sudden grounding furloughed 1,500 employees & stranded passengers. National operated 18 leased Boeing 757 jets, & billed itself as Las Vegas' hometown airline. It became the 5th busiest at the Las Vegas airport, flying about 260,000 passengers a month to Las Vegas & 11 other cities.

***Concorde Flies Over The Horizon ........ as the world's only supersonic passenger jet & a glamorous symbol of modern flight, will be definitively grounded by Air France & British Airways later this year due to flagging demand & rising costs. The decision to retire the slender, needle-nosed jets after over a quarter century of flight marks the end of an era in civil aviation. The product of a supersonic adventure launched by French President Charles de Gaulle & British Prime Minister Harold MacMillan in 1962, the Concorde evolved into a prestigious 100 seat tool of the rich & famous, who paid lofty sums to hurtle across the Atlantic at twice the speed of sound. Read the whole story:

***Emirates, A Major New Base ....... as the Dubai based carrier has been certified as a foreign repair station by the U.S. Federal Aviation Administration. Emirates is now authorized to carry out maintenance on U.S. registered civilian aircraft at its Dubai engineering headquarters as well as locations worldwide. The certification, under CFR Part 145 technical regulations, includes Boeing 737, 747, 757, 767, and 777 aircraft. Also covered are the Airbus A300, A310, A320, A330 and A340. Engines used by both types of aircraft that have now been certified are the Pratt & Whitney's JT9 & 4000, General Electric's CF6-50, CF6-80 & CFMI-56, and Rolls Royce RB211 & Trent 700/800. That's a whole lot of parts.

***Just Wearing The Plane ...... as a Southwest pilot & copilot -- both men -- were fired for allegedly taking off all or most of their clothes in the cockpit of their aircraft. They allegedly flew a B-737 without wearing their uniforms, or much of anything else, for that matter. According to the company, the incident happened months ago, but that it released the pilot & copilot after an investigation. One of the pilots reportedly claims he removed his uniform because coffee was spilled on it, & that a flight attendant bringing paper towels & soda water to the cockpit was a witness. Oh, please towel me! Southwest won't elaborate, but a spokesman said the matter is an internal one that is under appeal. However, some passengers say they can't imagine any situation that would explain the need to disrobe in flight (some passengers?). According to the FAA there are no rules against flying naked, although pilots do have to be dressed for all contingencies & emergencies when flying below 10,000 feet. In a compromise, the pilots have promised to remain in their underwear until the seat belt light is turned off. This incident gives a whole new meaning for that other word used to describe the "flight decK."



OUR "C" Section:  FF World Ocean News***

  4. FF World Ocean Briefs                                                     

***Going Both Ways ........... as Japan Customs & Tariff Bureau officers are to be deployed at the Los Angeles/Long Beach seaport as part of a Container Security Initiative (CSI) pact signed between the 2 countries last year. According to U.S. Customs & Border Protection (CBP), Japanese customs officers will target sea containers destined for Japan, & are to be responsible for screening any containers identified as a potential terrorist risk. Last Sept., the CBP & Japan's Customs service signed a CSI declaration of principles. The port of Yokohama then became the 10th operational CSI port in March, joining the already operational CSI ports of Rotterdam, LeHavre, Bremerhaven, Hamburg, Antwerp, Singapore, Vancouver, Montreal, & Halifax. Japan is the 2nd CSI partner country to station customs personnel in U.S. ports as part of the CSI program. Canadian Customs personnel are also currently stationed at Newark & Seattle. As part of the two nations CSI agreement, U.S. Customs & Border Protection has deployed a team of CBP officers to the port of Yokohama, who are targeting high-risk cargo containers destined for the U.S.

***OOCL Won't Ship The Bug ........ as Hong Kong based shipping company Orient Overseas Container Line (OOCL) is taking precautionary measures against the risk of Severe acute respiratory syndrome (SARS) infection at its offices & vessels. The company has implemented contingency plans to ensure that services will not be interrupted in case of a SARS infection at its offices or onboard its vessels. The company said in order to reduce the risk of suspension of service due to atypical pneumonia, in infected areas such as Hong Kong, it has assigned employees of key functions to work in teams at different office suites. In case of any crewmembers being infected by SARS, the company said it will have a full team of standby crew to take over, after immediate & thorough disinfection of the concerned vessel. Also all crew members of OOCL from infected areas are required to declare their health conditions before confirmation of assignment & boarding the vessels.

***Feuling Down ,,,,,,,,,.. as Matson Navigation Co., a subsidiary of Alexander & Baldwin of Honolulu, will follow the trend & reduce its fuel surcharge by 1%, from 7.5% to 6.5%, in its Hawaii & Guam services from May 4. Well, it's a start.

***Back To Iraq ......... as with post-war reconstruction clearly in its sights, U.S. freight forwarder EGL (formerly Circle) has announced plans to launch scheduled commercial-cargo sailings into the Iraqi port of Umm Qasr.

***Plotting Against Singapore ........ as Malaysian & Dubai businessmen are planning to build a new logistics hub in Malaysia in a move that could challenge Singapore's position as the region's leading shipping & logistics center. The Business Times said Dubai's economic czar Mohamed Ali Alabbar & Malaysian port magnate Syed Mokhtar Al-Bukhary have joined to establish an investment firm to invest in ports, logistics & real estate projects in Malaysia & the Middle East. One of their plans is to build a new logistics base in Malaysia's southern state of Johor near Singapore. The planned facility will be located next to Malaysia's Port of Tanjung Pelepas, the start-up which has snared 2 of Singapore's main shipping clients & is an emerging rival for the city-state's preeminence as a regional transshipment hub. Malaysia has been moving to strengthen Johor's capabilities as a logistics hub to rival its smaller neighbor. Alabbar is described as the leading economic adviser to Dubai's Crown Prince Sheikh Mohammad Al Maktoum & says the joint venture intends to tap a massive pool of money pulled out of the U.S. by Middle East investors following the Sept. 11, 2001 terrorist attacks in New York & Washington.

***What Over Capacity? ....... as Korea's shipbuilding orders shot up by a whopping 339.7% on year to 4.03 million CGT (compensated gross tons) for the 1st 3 months of this year. The record order valued at US$5.36Bn suggests that the volume of exports will taper off in the coming months following the current peak. Japanese carrier "K" Line alone has placed orders for 5 new container vessels, each with a capacity of 4,000 TEU, with Korean shipbuilder Hyundai Heavy Industries Co. -- all to be delivered between Dec. 2004 & Feb. 2005.

***Container Containment indicative of the nation's trade deficit, ocean cargo containers are stacking up around the U.S. As one example, the Newark-Elizabeth port complex unloaded more than 1.6 million full containers in the 1st 11 months of 2002, but shipped out only 688,000, said the Port Authority of New York & New Jersey, which runs the ports. Local cities are looking into limiting the height of container stacks, as long as jobs at the port aren't affected. Some observers say the containers stand in the way of improving the area around the ports. This is a national problem waiting for a smart answer.

***Who Goes There? ........ as starting July 1, 2003, the Panama Canal Authority will require that any vessel over 300 gross tons must have an automatic identification system (AIS) in order to transit the canal. Portable AIS units will be available for lease from the Authority at a cost of US$150 per transit.

***Chile Auction ....... as it will in the 2nd half of 2003 hold an Int'l auction for operations of its northern port of Arica, President Ricardo Lagos said during a visit to the port.

***Do We Still Know How To Do This? ........ as the 1st commercial dry cargo vessel built in the U.S. in 10 years embarked on her 1st working maiden voyage from the Port of Tacoma on April 23. Totem Ocean Trailer Express, Inc. is introducing the 1st of 2 new Orca Class roll-on/roll-off trailer vessels, the M/V Midnight Sun, into the Port of Tacoma to Port of Anchorage, Alaska, trade route, scheduled to make her maiden voyage

***Detroit De-Iced With A New Record ....... as April 15 marked more than U.S. tax day -- it was a 1st in maritime history, as the Port of Detroit welcomed not 1, but 3, oceangoing vessels to inaugurate opening the 2003 Int'l Great Lakes Shipping Season. The M/V Lake Ontario, a Marshall Islands-flagged vessel, was officially the 1st ship that arrived at Detroit Marine Terminal, Inc. (DMT) at 6:30 a.m. At 7 a.m., M/V Goviken, the Bahamian-flagged ship arrived. Its arrival was followed by the Hong Kong-flagged vessel, M/V Federal Oshima, which docked at Trenton at 8:30 a.m.

***"Pacific Shipper"Joins JOC ......... as the 77-year-old Int'l trade & maritime weekly will become part of The Journal of Commerce Shipper Group. The magazine group previously included, and will continue to include, The Journal of Commerce, Shipping Digest, The Florida Shipper & Gulf Shipper. The Pacific Shipper is a magazine which has something for everyone. A great publication.

***More Than Just Loose Change ........ as on March 21 at 6 a.m. RMS Queen Mary 2 entered open water for the 1st time as she was floated out from her building dock to a finishing basin at the Alstom Chantiers shipyard in Saint Nazaire, France. That milestone signified the final stages of construction. In days prior to its float out, Cunard observed an age-old shipping tradition. When a sailing ship had its main mast put into its mounting at the bottom of the ship, it was known as the mast stepping. It was considered good luck to place coins under the mast at the stepping. For QM2, two English pounds & a 2 Euro coin were placed just behind the signal mast above the Bridge.

***Shanghai's New Big Ditch ....... as it is to construct an inland water channel from 2005, which is expected to help the city's inland container volume to reach 5 million TEU per year by 2010, according to China Communications News. The 2,100 km long channel is forecast to help with the navigation of bigger container vessels. The Shanghai Municipal Government is expected to make an investment of US$363.43M.

***Sick, Sicker, Sickest ....... as group of North Korean sailors charged with helping to smuggle 110 pounds of heroin into Australia appeared in court this month & were ordered to stand trial in a case that could highlight illicit efforts by Kim Jong Il's regime to prop up the communist state's moribund economy. One of the crew of the North Korean cargo M/V Pong Su denied any involvement in the trafficking of the drugs, with an estimated street value of US$48M. In small groups, 26 of the crew were ushered into Sydney Central Local Court by police wearing masks & latex gloves. Australian television later reported 3 other crew had been struck down with tuberculosis, while the Capt. had suffered a heart attack shortly after his arrest.

***This Month in U.S. Navy History

*1778 - Capt. John Paul Jones of Ranger leads a landing party raid on Whitehaven, England.

*1912 - USS Chester (CL 1) & USS Salem (CL 3) sailed from Massachusetts to assist RMS Titanic survivors.

*1918 - First Marine Aviation Force formed at Marine Flying Field, Miami.

*1941 - USS Niblack (DD 424), while rescuing survivors of a torpedoed merchant ship, depth-charged a German submarine; the 1st action of WW II between U.S. & German navies.

*1946 - USS Missouri (BB 63) arrives in Turkey to return the body of Turkish ambassador to the U.S. & to show U.S. support & willingness to defend Turkey.

*1961 - Launching of 1st nuclear-powered guided-missile cruiser, USS Bainbridge (CGN 25), at Quincy, Mass.

*1963 - During diving tests, USS Thresher (SSN 593) lost with all hands (112 crew & 12 civilians) east of Cape Cod, Mass.

*1969 - A North Korean aircraft shoots down a Navy EC-121 reconnaissance aircraft over the Sea of Japan.

*1987 - The U.S. Navy is ordered to provide assistance to neutral vessels under Iranian attack outside the exclusion zone & which requested help.

U.S. Navy History


5. The Cargo Letter Cargo Damage Dispatches                        

**Back By Popular Demand**

We're sorry, but there were so many sinkings, explosions, pirate attacks, fires, cargo mishaps, battles on the water & other disasters at sea that we do not have room to print even the highlights this month. Many people lost their lives at sea this month!!

But you can read all this month's disaster news at our special Internet web feature which provides full details of each event -- our Vessel Casualties & Pirate Activity Database.  Bookmark the site and visit every day! Updated twice daily.

SPECIAL NOTE: Please view the dramatic new pictures at our special "Gallery of Cargo Loss" website feature. 

SPECIAL NOTE: "FedEx Vs. UPS "Road Challenge" at our Internet "Singles Only" Feature. Don't miss this!

NOTE: The historic dangers of carriage by sea continue to be quite real.  Shippers 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"   


SPECIAL FEATURE >> Severe Acute Respiratory Syndrome SARS >>>>>>>>> do not be alarmed, but be knowledgeable. A repeat of 1918?

Influenza Pandemic 1918 ........ the worst epidemic America has ever known.

Cathay Pacific ........ new SARS screening procedures.

Centers For Disease Control .......... Interim Guidelines about Severe Acute Respiratory Syndrome (SARS) For Cruise Ship Passengers & Crew Members

Centers For Disease Control ...... SARS, a guide.

U.S. Customs ........ SARS, a guide.

World Health Organization ....... SARS, a guide.

Influenza Pandemic

1918 Influenza Pandemic - Chicago

1918 Pandemic ........ 70 million dead from influenza


MONTHLY FEATURES >>>>>>>>> Here are our customary world wide web sites of the month for your business, your information and your amusement.............

American Veteran Search Page

Best Practices, LLC. ........ new study focuses on over 100 successful companies & captures 20 metrics to identify the best performers across the entire supply chain.

Business Intelligence ......... analyzing customer data.

Bob Hoe, Thanks For The Memories

California Trade Report

E-Nurturing ....... a supply chain marketing lesson learned from IBM

Homeland Security Analyst Issue 4 .......... latest issue of HSRC's newsletter examines areas of concern in cargo security, "dirty bomb" security, homeland security standards and the porting of "civilian" technologies & products to homeland security. FREE.

Iraqi Corporate Law

Iraq Reconstruction Daily Fact Sheet

MOL ......... new version of its global liner division web site.

Mediation Search ......... 1st comprehensive directory for experts in mediation, ADR & arbitration in the U.S. & UK. There is also a witness directory.

Panama Canal ......... March Summary of Operations

Transport Canada ........ new "Small Commercial Vessels" page.



Cargo Facts Air Cargo Newsletter ....... US$395 per year.

Distribution, Wholesaling & Logistics in China covers distribution, logistics & transportation in China. The report begins with an overview of these industries & an analysis of expected changes following China's entry into the World Trade Organization (WTO).

Globalink ........ independent forwarder network.

Keller's Security Resource Center

Logistics Management Magazine ......... to subscribe FREE.

Maritime Reporter / Marine News ...... world's largest commercial maritime magazines can be delivered to your mailbox each month for FREE.

Navigation Technologies ........ digital maps for navigation and location-based services around the world.

Portals Magazine ......... corporate strategies for FREE.

NOTE: The Cargo Letter does not receive payment for these postings.



7 Ways To Improve YOUR Supply Chain ........Bentley College, Waltham, Massachusetts, Tuesday, June 10, 2003.

American Bar Assn. Section of Int'l Law & Practice .......Spring Conference- "Practicing Law - Inescapably Global." May 7-10, 2003- Mayflower Hotel - Washington, DC

Distribution/Computer EXPO ....... May 21-22 & Seminars May 20, Navy Pier, Chicago.

European Shipper's Council & Mare Forum ....... present the Shipper Forum 2003, on 12 June 2003 in ANTWERP, Belgium

Federal Maritime Commission (FMC) ........10:00 A.M. - May 6, 2003, 800 North Capitol Street, N.W., First Floor Hearing Room, Washington, D.C. -- Fact Finding Investigation No. 25 - Practices of Transpacific Stabilization Agreement Members Covering the 2002-2003 Service Contract Season. (202) 523-5725

Global Trade Review ......Managing Emerging Markets Risk conference, University Club, New York, June 12th.

Great Freight Show: A Moving Experience ....... highly topical conference debating the real issues of managing different modes of freight transport --10th & 11th June 2003) in Blackpool, UK.

Harbor Transportation Club Annual Golf Tournament .........Fri., May 23, 2003, California Country Club, 1509 S. Workman Mill Road, Whittier, CA 90601

Int'l Chemical & Oil Pollution Conference & Exhibition 2003 ........ 27-29 Aug. 2003, Shangri-La Hotel, Singapore

Los Angeles Transportation Club ........ presents May 6, 2003 Executive Series Speaker: Jane A. Beseda, VP & General Manager, North American Parts Operations, Toyota Motor Sales USA. Tues. May 6,  2003 11:30AM, Marriott Norwalk Hotel, 13111 Sycamore Drive, Norwalk, CA

Puget Sound Passenger Vessel Seminar ......... U.S. Coast Guard, Seattle, June 17, 2003. Response to a major marine casualty involving a medium to large passenger vessels.

Seatrade London Int'l Maritime Convention ........16-18 Sept. 2003, ExCeL, London, UK

Strategic Counsel of Security Technology ........ Port Security Conference, Rotterdam, May 20

Webcast: Forecasting From The Center of The Supply Chain .......... May 8, 1pm ET, from Microsoft.


FOR FUN>>>>>>>>>

"Elmo" The Iraqi Information Minister, aka "Baghdad Bob."

Iraqi "Most Wanted" Playing Cards ....... US$5.95.



OUR "E" Section:  The Forwarder/Broker World***

  7. New U.S. Transport Related Legal Cases _______  

***U.S. Supreme Court Invitation ...... as it has asked the U.S. Solicitor General to file a brief expressing the views of the U.S. in the case of James N. Kirby, Pty Ltd. v. Norfolk Southern Railway Co. In this case (decided in 2002 by the 11th Circuit), the appellate court held, among other things, that where multiple bills of lading were involved, a railroad was not the beneficiary of the COGSA limitation of liability because the Himalaya Clause in the 1st bill of lading was not sufficiently broad to encompass the railroad's shipment under a subsequent bill of lading.

***Another U.S. Supreme Court Query ...... as it has invited the U.S. Solicitor General to file a brief expressing the views of the U.S. in the case of Green Fire Insurance Company v. M/V Hyundai Liberty. In this case (decided in 2002 by the 9th Circuit under the name of Kukje Hwajae Insurance v. M/V Hyundai Liberty), the 9th Circuit U.S Court of Appeals held, among other things, that the forum selection clause in the ship owner's bill of lading was controlling as regards an action brought against the ship for damage to cargo carried on board. The Kukje Kukje Hwajae Insurance case was won for our client in the federal trial court by The Law Offices of Countryman & McDaniel.

***Dole Food Co. v. Patrickson -&- Dead Sea Bromine Co. v. Patrickson (consolidated)

U.S. Supreme Court -- April 22, 2003

Foreign Sovereign Immunities Act (Removal of a Corporate Subsidiary) The U.S. Supreme Court held 7-2 (opinion by Kenney, concurrence in part & dissent in part by Breyer & O'Connor) that a corporation is an instrumentality of a foreign state under the Foreign Sovereign Immunities Act (FSIA) only if the foreign state itself owns a majority of the corporation's shares & status is to be determined at the time a suit is filed. READ THE DECISION


***ABN AMRO v. Geologisitics

2nd Circuit U.S Court of Appeals -- 2003 U.S. Dist. Lexis 5007

Freight Forwarder as "Travel Agent" -- Plaintiffs sued to recover for damage during transport of a large, prototype envelope-printing press. A 7,000 pound machine was damaged on its return home to Glen Head, New York from a trade show in Europe. The importer had instructed Geologistics (acting as "agent," not carrier) to "make sure that the trucking company is prepared to not only unload [the] machine on our dock but they must also be capable of moving it and placing it in our building. We will require a trucking line that is capable of 'rigging' the unit in our building." Geologistics promised to use "reasonable care in the selection of carriers," but the court found that despite the fact that the trucker did not have a proper permit to carry the load, the most for which Geologistics was culpable for was ordinary negligence. However, the court found that no amount of "fiery rhetoric" could change the reality of a limitation of liability -- as contained in Geologistics invoice "Terms & Conditions of Service." Damages were limited to US$50 under the National Customs Brokers & Forwarders Assoc. of America (NCBFAA) standard "Terms & Conditions of Service." The forwarder was just a "Travel Agent."


***Cargil Ferrous Int'l Vs. M/V Sea Phoenix

5th Circuit U.S. Court of Appeals -- April 5, 2003

Bills of Lading: Court ruled that when a charter party is clearly identified in a bill of lading, it may be incorporated into the bill of lading. The time charter for the vessel included a clause providing for arbitration of disputes via a specific procedure. The time charterer then entered into a voyage charter for carriage of steel coils from Latvia to New Orleans. Bills of lading were then executed by the charterer & the shipper for shipment of a cargo of steel coils. The bills of lading stated that they incorporated all terms and conditions of the time charter. The steel coils were delivered in a damaged condition & the shipper sought local arbitration. The vessel owner's objection was overruled by the trial court. On appeal, the court held that the evidence showed that the intent of the parties when the bills of lading were executed was to incorporate the provisions of voyage charter into the bills of lading.         


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

The Cargo Letter Correspondents:
Michael S. McDaniel Esq, Editor (Countryman & McDaniel)
David Schuchman -- Interpool Corp. -- Webmaster of The Cargo Letter Archive
Cameron W. Roberts, Esq. (Countryman & McDaniel)


The Cargo Letter
since 1978)

A world news service for Air/Ocean Freight Forwarders, NVOCC's, Consolidators, Indirect Air Carriers, Surveyors, Intermodal Shipper's Agents, Inland Carriers, Customs Brokers and Liability & Marine Underwriters world-wide ...........a free service to more than 8,000 industry subscribers & readers on 6 continents. 
Michael S.
McDaniel, Editor.

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