Law Offices of Countryman & McDaniel


Air & Ocean Logistics - Customs Broker News

30 August 2003

Part 1 of 1


Good Sunday Evening 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." Unique to The Cargo Letter, none of us are running for Governor of California.

To help you find what you need -- FAST -- there's now a transport search engine installed at our Cargo Law.com website!

Contribute your knowledge, stories & company information.......by e-mail to The Cargo Letter.  We strive to bring you useful information which is timely & topical.  Be sure to visit our website.

Our corporate sponsor &endash;- Interpool, Inc. -- named again to Forbes "Best 200 Small Companies" List -- for the 2nd consecutive year! -- http://www.interpool.com/

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

INDEX to The Cargo Letter:

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

1. Freight Forwarder Trade Briefs ______________                            

2. The Cargo Letter Financial Page ______________                               

OUR "B" Section:  FF World 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 Transport Related Legal Cases ___________            



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

  1. Freight Forwarder Trade Briefs _____________

***Bye Bye Burma ....... as the U.S. has banned imports of products from Burma as part of the new Burmese Freedom & Democracy Act of 2003. Among other measures, the legislation freezes the assets of senior Burmese officials & bans virtually all remittances to Burma.

***Soft Lumber -- Tough Problem .......... as U.S. industry pegs the Canadian softwood lumber subsidy to 30%. A U.S. lumber lobby sent the Commerce Dept. a detailed analysis for recalculating Canadian timber subsidies as required by a North America Free Trade Agreement panel on Aug. 13. The Washington-based Coalition for Fair Lumber Imports said the total Canadian subsidy calculation increases the countervailing duty rate to between 22% & 30% based on alternative approaches to subsidy measurement under Commerce regulations. For years, U.S. lumber interests have accused Canada's softwood lumber producers of selling their products well below market value, because they receive subsidies from the provincial governments. "Unfair Canadian lumber imports have caused scores of U.S. sawmill shutdowns, thousands of U.S. job losses and the undervaluing of millions of U.S. family timber holdings," the coalition said. Commerce investigated Canadian lumber subsidies in 2001-02 & issued an 18.8% subsidy determination in May 2002. The NAFTA panel affirmed most of Commerce's findings, except that U.S. timber prices could not be considered "world prices" within the meaning of Commerce's regulations and the price benchmark must be explained & adjusted by Oct. 13.

***New China Docs ...... as it has developed a new export license/commercial invoice for textile & apparel shipments manufactured in the country after Jan. 1, 2004. The new license/invoice will include a watermark issued by China's Ministry of Commerce, replacing the former watermark issued by the country's Ministry of Foreign Trade & Economic Cooperation. There will be a grace period to switch to the new license/invoice during the month of Jan. 2004. Products produced after Feb. 1, however, must use the new license/invoice. The U.S. Committee for the Implementation of Textile Agreements, which accepted China's switch to the new license/invoice form, said the visa stamp & Electronic Visa Information System (ELVIS) would remain unchanged.

***New Kiwi Rules ....... as New Zealand Customs has issued security guidelines to improve the accuracy of data being submitted by port users. Ocean vessel names should be stated in full, abbreviations should not be used (e.g. Columbus not COL, P&O Nedlloyd not PONL). Individual words should be separated with a single space (e.g. direct KEA). Do not use the prefix M/V. Voyage numbers are to be stated separately in the voyage number field. The container number must be stated without spaces (e.g. ABCU1234567, not ABCU 1234567) Airfreight AWB & flight numbers should entered without spaces (e.g. QF47, not QF 47).

***Means To Heal ........ as following an impassioned appeal from Africa, the World Trade Organization sealed a deal to allow poor countries to import cheap copies of patented drugs for killer diseases like AIDS, malaria & tuberculosis. The U.S. had been trying to protect the interests of drug companies, which feared they could lose control of patent rights. U.S. concessions this month broke deadlock on the issue & protects both manufacturers & those who must have help.

***Indonesian Security Aid ........ as the U.S. Trade & Development Agency has awarded two grants totaling US$845,000 to Indonesia to help the country meet transportation security objectives as part of its participation in the Secure Trade and the Asia-Pacific Economic Cooperation Region, also known as the STAR Initiative. APEC leaders agreed to the security measures at a summit in Los Cabos, Mexico in Oct. 2002. One of the U.S. grants, valued at US$555,000, will go to Indonesia's Directorate General of Sea Communication to help the Port of Tanjung Priok develop an information technology & communications infrastructure. The project should help the port more efficiently target dangerous shipments & deter maritime piracy.

***Thai Security Aid ........ as the U.S. Trade & Development Agency has awarded Thailand a US$500,000 grant for supply chain security improvements. The money will be used for an "end-to-end" supply chain security system demonstration between the ports of Laem Chabang & Seattle.

***Bigger Brand Euro-Teeth ........ as the EC has adopted a regulation that reinforces the powers of customs authorities to take action against goods entering EU member states which are suspected of being counterfeit or pirated. The regulation empowers customs agents to seize, on their own initiative, goods which they suspect of infringing Int'l Property rights, without requiring an application from the rights holder.

***New "In-Bond" Directives Said "Potentially Disruptive" ........ as the Bureau of Customs & Border Protection on Aug. 7 issued CBP Directive #3240-03A, titled, "In-Bond Processing & Customs Form 7512 Preparation." CBP stated that the purpose of this directive is to ensure uniform processing of in-bond documents, improve accountability of the in-bond process & improve enforcement capability by mandating more complete information. The term "In-Bond" refers to goods that are still in the agency's control. Customs Form 7512 can be used to move goods that are in CBP custody from one port to another, either to be entered into the commerce of the U.S. at the destination location or to be exported. CBP noted that the changes in the processing of in-bond shipments may be "potentially disruptive," so the implementation of this directive is being phased in over 60 days. We suggest you review Directive #3240-03A, which is available on the CBP web site.    

***Freedom For Bahrain? .......... as the Int'l Trade Commission has started an analysis of the economic impact of a U.S.-Bahrain free trade agreement on U.S. industry. The U.S. Trade Representative requested the study to help prepare it for its consultations with Congress and for the negotiations with Bahrain. The ITC's advice to the Bush administration will be based on the 2003 Harmonized Tariff System nomenclature & 2002 trade data. A list of specific products focused on in the study is available on line (select "131" at the left, then scroll to the bottom for the link to this investigation). The ITC must issue its report to USTR by Dec. 12. On the Web.

***South Pacific Freedom ........ as the Singapore-Australia Free Trade Agreement, or "SAFTA" commenced on July 28th & provides duty-free entry for goods that originate in either country. Eligibility under SAFTA will be subject to strict compliance criteria. Goods will be required to meet specific rules of origin related to goods wholly obtained from, wholly manufactured in, or partly manufactured in trade between the countries.                                       

***California State Trade Agency Shuttered ........ as the organization, which over the past several years has drawn fire for its poor performance & lack of leadership from the state's Int'l trade community, has been disbanded as a harried state legislature saw fit to write it out of the state budget just recently signed by an equally-harried Governor Gray Davis. Eliminated are the state's 12 overseas trade offices; the California Export Finance Office (CEFO); & the California Technology Investment Partnership, which funds startup high tech companies. The closure of the California Technology, Trade & Commerce Agency (CTTCA) effectively leaves California, the 6th largest economy in the world, without overseas business representation. According to one insider at the Agency, the bulk of the blame "should be laid at the feet of California Governor Gray Davis, who packed the Agency with political appointees & inexperienced people with virtually no business experience or acumen." Gary Coleman was unavailable for comment.

***Tobacco Smuggling Wars Continue ......... as manufacturers have won an appeal challenging lawsuits by the governments of Belize, Ecuador & Honduras that claim the companies conspired to smuggle cigarettes into their countries to boost profits & evade taxes. The racketeering suits against Philip Morris, R.J. Reynolds, Brown & Williamson, Lorillard & Liggett boil down to attempts to enforce foreign tax claims in U.S. courts, the 11th U.S. Circuit Court of Appeals decided, upholding an earlier ruling by a Miami federal judge throwing out the lawsuit. The court ruled that the strategy violates 18th century English common law & cannot be pursued. U.S. courts are simply not in a position to & are not going to enforce foreign governments' tax laws The ruling did not address whether the companies smuggled cigarettes. A similar appeal based on the common law revenue rule is pending before the 2nd Circuit Court of Appeals in New York in a lawsuit by the European Union.

***But, The Butts ....... as Canada Customs & Revenue Agency (CCRA) has intercepted 127,050 cartons of smuggled, counterfeit cigarettes in 3 separate shipments, worth more than US$6.53M. The RCMP, working in partnership with the CCRA, has been investigating these incidents to determine possible links to organized crime on national & Int'l levels. In June & July, inspectors found a total of 124,000 cartons of counterfeit Canadian cigarettes & 3,000 cartons of Chinese-brand cigarettes -- declared as paper products & picture frames.

***The UPS Door-To-Door Supply Chain ......... as it has announced a newly enhanced service, called "Supplier Management," that coordinates the logistics activity of Int'l vendors & suppliers on a customer's behalf for a seamless supply chain. The service was introduced last week at MAGIC, an Int'l apparel show at Las Vegas. "UPS has once again made it easier for customers to conduct commerce globally with an innovative Int'l service that manages multiple vendors & suppliers despite varying languages, cultures, time zones & distances," said Bob Garrison, UPS Supply Chain Solutions. UPS Supply Chain Solutions, acting on a customer's operating instructions as well as vendor purchase orders, proactively manages the offshore logistics for the importer. From sourcing to destination, order information is provided so customers can get greater order & shipment control. The service also enables the customer to take advantage of integrated supply chain solutions that could include Int'l trade finance, vendor managed inventory, customs brokerage, network planning tools & the UPS small package network. On the Web.

***Supply Chain Management Key To Cost Cutting ........ as companies are learning that reducing the nodes in their logistics network, & avoiding unnecessary activities when possible, reduces supply chain costs without compromising successful practices, according to a study from research & consulting firm Best Practices, LLC. The study uncovers the tactics & practices that manage supply chain costs to bring maximum value to the organization. On the Web.

***UPS Study Finds Supply Chains Crucial ....... as a majority of corporate America's chief financial officers view supply chains as crucial to achieving corporate objectives. Yet only 33% say business & operational plans are well integrated & 62% say their companies seem capable of making only incremental improvements today, according to a survey released by UPS Consulting, the strategic consulting arm of UPS. The survey of 247 senior financial executives also found an increasing number of CFOs determined to make improvements. In fact, nearly half of CFOs anticipate playing a vital leadership role in supply chain decisions by 2005. Currently, that figure is 34%. The survey, conducted by CFO Research Services, a unit of CFO Publishing Corp., polled senior financial executives on their involvement in & perceptions of supply chains within their companies. Some 61% agreed that management of their supply chains was crucial to corporate success. The survey found CFOs most likely to cite 2 key objectives in explaining the importance of supply chain management: 93% cited need to reduce operating costs & 82% identified the need to improve customer service. Complete survey results are available on the Web.

***Did Your Kiss Your Truck Driver Last Week? ........ as President George W. Bush praised America's professional truck drivers for their "important contributions to our economy and our quality of life." The President's comments came as the trucking industry celebrated National Truck Driver Appreciation Week, Aug. 24-30.

*Professional truck drivers drove their "18 wheelers" over 400 billion miles last year.

*Trucks haul 68% of the freight moved in the U.S., 82% of U.S. communities depend solely on trucking for delivery of their goods.

*Trucks pay 37% of all highway user taxes (over US$7,000 per truck).

*Though total highway fatalities are at a 12-year high, the number of fatalities in truck-related crashes has dropped for the 5th straight year.

* In AAA &federal crash causation studies of truck-involved fatal crashes, investigators assign unsafe driving factors to the passenger vehicle driver in up to 75% of all crashes.

***Money Found On The Roadway .......... as Yellow Corp. said that the savings from its planned acquisition of Roadway Corp. could reach US$198M after 5 years. The 2 LTL giants announced the US$966M deal on July 8. The Overland Park, KS., company said that severance costs may be US$1.7M in the 1st year & the cost to combine the companies could be US$3.6M in the 2nd year & US$1.2M in year three.

***CNF In Class Action ......as a federal class action lawsuit, charging that the trucking & air freight conglomerate CNF, Inc., and its actuarial firm, Towers, Perrin, Forster & Crosby, Inc., caused the Consolidated Freightways Corp., (CFC) Pension Plan to become underfunded, costing retirees millions of dollars in lost pension benefits. In 1996, CNF spun off CFC Inc. to create a stand-alone, unionized trucking company at a time when the industry was being deregulated and non-unionized competitors were gaining market share. The lawsuit, entitled Paulsen et al v. CNF, Inc., et al, No. 03-3960 JW, was filed in U.S. District Court in San Jose.

***CF Sells The Canadians ....... as Consolidated Freightways Corp. (CFC) has received approval through bankruptcy court to sell the operations of Canadian Freightways & subsidiaries (CFL) to TransForce Income Fund for C$69.6 million (Canadian). When combined with substantially all of CFL-related liabilities, which TransForce is assuming, the value of the sale is approximately US$100M. Last week the sale of substantially all of the assets of Canadian Freightways was conducted in an open auction among competing parties. Bidding began at the contract price & TransForce was the winning participant.

***Computer Dating ........ as Schneider Brokerage, a division of the national LTL carrier Schneider National Inc., has launched FreightPlace, a tool designed to aid motor carriers in finding shipments to match their capacity. FreightPlace is free & enables carriers to anonymously search for & find loads to fill their excess capacity.  Carriers can view potential loads for their capacity in real-time & connect with a Schneider's freight brokerage associate via online chat or telephone to obtain more information & negotiate pricing. FreightPlace also allows carriers who register on the site to take advantage of a capacity posting feature that automatically searches for loads that match their asset availability. On the Web.

***How Green Is Mexico? .......... as the U.S. Dept. of Transportation says it will comply with a federal appeals court order to study the environmental impact that Mexican trucks would have on U.S. highways. The study would analyze short & long-term environmental impacts and should take a year to 18 months, DOT said. Dept. officials decided to go ahead with the study in order to expedite opening U.S. roads to Mexican trucks. The 9th U.S. Circuit Court of Appeals previously stopped allowing Mexican trucks on U.S. roads in response to a lawsuit filed by environmental, labor & trucking groups. The government had until June 30 to file court documents asking the Supreme Court to review the case, but the court has twice extended that deadline. The DOT now has until Sept. 9 to seek the review. Since 1982, Mexican trucks have been prohibited from carrying cargo beyond a border commercial zone along the border -- but under NAFTA Mexican trucks were to have gained full access to U.S. roads beginning in 2000. The Clinton administration refused to grant them entry.

***U.S. Truck Tonnage Up ....... as the American Trucking Assn.'s seasonally adjusted Truck Tonnage Index increased 5.4% to 155.6 (1993=100%) in July, the national assn. for the trucking industry reported. Compared to July 2002, the unadjusted index increased by 2.3%. July's jump was in addition to a revised 1.9 percent increase in June & was the 2nd consecutive monthly rise in the index. For the first 7 months of 2003, the truck tonnage index was 3.7% higher compared to the same time period in 2002. July's increase is further evidence that the trucking industry is on a recovery path, said the association, and that freight volumes should to continue to improve as the economy does.

***No Thank You ....... as TMM announced that, as a result of the unanimous vote by its shareholders to not approve the sale of TMM's interests in Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (Grupo TFM) to Kansas City Southern (KCS).

***Stonepath Hits The G Spot ........ as the global logistics services organization, has acquired a controlling interest in the Singapore & Cambodian-based operations of the G-Link Group, a regional logistics business headquartered in Singapore with offices throughout Southeast Asia. In consideration for a 70% interest in two G-Link offices, Stonepath paid US$3.7M at closing through a combination of US$2.8M in cash & US$900,000 in value of the Company's common stock. G-Link will also be entitled to an earn-out arrangement over a period of 4 years of up to US$2.5M contingent upon future financial performance of the business. As additional purchase price, on a post-closing basis the Company has also agreed to pay G-Link for excess working capital estimated at US$1.6M through the issuance of Company stock.

***Darwin Award For Border Smuggler Driving ........ as Tucson police investigating a traffic accident this month found 3 tons of marijuana in one of vehicles involved. The drugs had an estimated street value of US$10M. Police said a truck hauling a white cargo trailer ran a red light & hit another truck. The truck's driver jumped out & took off in another car -- probably a designated getaway vehicle. Police investigating the accident discovered 63 large boxes containing marijuana inside the trailer. If the driver had not fled, police might not have searched the trailer because it isn't part of a routine traffic collision investigation. Dah!



2. The Cargo Letter Financial Page ____________   


**British Airways. DOWN with a pretax loss of GBP45 million (US$72.5M) for 1st quarter to June 30, compared to a profit of GBP65 million during the same quarter last year.

**Eagle Global Logistics (EGL) UP with net income of US$6.5M for Q2 ended June 30, compared to US$938,000 in 2nd quarter of 2002.

**Lufthansa. UP operating profit of US$73.2M 2nd quarter of 2003.

**Neptune Orient Lines Ltd. UP with a net profit of US$88.7M for 1st half of 2003, compared to a loss of US$155.7M for 1st half of 2002.

**OOCL. UP with interim profit before taxation of US$88.7M compared with US$4.1M for the same period last year.

**Qantas. UP with a profit before tax of A$502.3 million for the year ended June 30, 2003 -- net profit after tax was A$343.5 million.

**P&O Nedlloyd. UP with operating profit in 2nd quarter of US$11M before restructuring costs of US$4M, compared to a loss of US$46M in Q2 2002. This represents a substantial improvement in performance compared with both Q2 2002 & Q1 2003 (an operating loss of US$57M before restructuring costs of US$1M).

**Sinotrans Ltd. UP as net profit for the 1st half of 2003 was approximately RMB345.6 million, representing a growth of 17.8% over same period in 2002.

**Stonepath Group. UP with net income of US$404,000 or $0.01 per basic and diluted share for 2nd quarter of 2003, compared to a net loss attributable to common stockholders of US$334,000 or $0.02 per basic & diluted share for 2nd quarter 2002.

**Thai Airways Int.l. DOWN with it's 1st quarterly loss for 3 years in the wake of the SARS outbreak. In the 3 months to June, Thailand's national airline posted a THB1.27 billion (US$30M) net loss, while same quarter last year produced net profits of THB3.35 billion. In the 9 months to June its net profit fell 24% to THB7.02 billion from THB9.22 billion in previous same period.

***Asian Ocean Carriers Smile ....... as they are seeing a huge rise in their stock fortunes, with the trend looking like it will continue as more companies announce their mid-term results. The rises are being seen across Asia: Singapore-based NOL has seen its share price increase some 80%; Japan's K Line stock is up some 65% & Taiwanese Yang Ming Marine shares are trading at twice the value they were a year ago. Asian products are one of the main reasons for these increases, with both U.S. & European demand for clothing, consumer goods & electronics fueling the stock climb, as well as more than filling available cargo capacity. This has allowed carriers to push rates up & push them further into the black.

***ABX Air Stock Out ....... as it is now trading on the OTC Bulletin Board under the ticker ABXAV since July 23. Formerly the airline subsidiary of Airborne, Inc, ABX Air was been separated into an independent company as of Aug. 15. Shareholders of Airborne at the close of business Aug. 15, received US$21.25 per share in cash & one share of ABX Air for each Airborne share held. Airborne completed the sale of its ground operations to DHL earlier that day.

***UPS Buy Back ...... as it's board of directors has raised to US$1Bn its authorization for the repurchase of Class A & Class B shares, up from a roughly US$500M balance from a previous authorization.



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

3. Freight Forwarder World Air Briefs __________ 

***Claims Uniformity Finally At Hand? ........ as the Montreal Convention 1999, which will replace the entire Warsaw treaty system & its contradictory protocols, has now attracted 29 ratifications out of the 30 needed to bring it into force. It will come into effect between the states that have ratified it, 60 days after the next state has completed the process of ratification. The 29 members so far are: Bahrain, Barbados, Belize, Botswana, Canada, Colombia, Cyprus, Czech Republic, Estonia, Greece, Japan, Jordan, Kenya, Kuwait, FYR Macedonia, Mexico, Namibia, Nigeria, New Zealand, Panama, Paraguay, Peru, Portugal, Romania, Slovakia, Slovenia, Syria, Tanzania, & UAE. Expected that the other EU member states & the U.S. will soon ratify the convention. Read more.

***TSA Foot Drag ........ as after a slow start in training pilots to carry guns, the U.S. Transportation Security Admin. said that it has filled its weekly classes & expects to arm all qualified pilots who volunteer within a year. However, an association of pilots says that the government is discouraging volunteers by insisting on psychological testing, requiring lockboxes to carry weapons & holding training at a single remote site. Fewer than 200 passenger airline pilots were trained & deputized to carry a weapon since Congress ordered the program in Nov. 2002. "We should have thousands, not hundreds," said Capt. Bob Lambert, president of the Airline Pilots' Security Alliance, a grassroots organization with members from all major U.S. airlines. Lambert doesn't believe the testing is objective. "We've seen people turned down with exemplary backgrounds," he said. "How can they explain turning down people who've gone through federal law enforcement training?" TSA spokesman Robert Johnson said confusion may have resulted because a rejection letter was mistakenly sent to 160 candidates. "It was just a clerical error" he said, quoting a famous U.S. Immigration Service excuse. Pilots estimate 40,000 of them would sign up if the agency didn't insist on the testing, which they view as unnecessary because they endure exhaustive screening just to become commercial airline pilots. Pilots say the agency is dragging its feet because it didn't want the program in the first place. On the Web. >> Read more.

***Good To Go -- Or Back To The Lab? .......... as it is not inevitable that the U.S. government will spend billions of dollars to arm commercial aircraft with defensive systems to protect them from shoulder-fired missiles, despite recent intelligence & incidents that show terrorists are trying to acquire such weapons, said Gordon England, Deputy Secretary of Homeland Security. "This is not just a simple question of attaching something to the airplane, and there are lots of different airplanes" to consider, he said. The 2004 fiscal year Homeland Security budget passed by Congress includes US$60M for antimissile technology efforts. However, Defense contractors say the antimissile technology is proven & could be installed immediately. Some systems cost as much as US$2M each depending on how many of the nation's 6,800 active commercial aircraft are outfitted with the devices. Experts have estimated the cost of protecting all airplanes with such systems at between US$7Bn & US$10Bn.

***Pay No Attention To That DHL Behind The Curtain ............ as Jeffrey Gordon, a Columbia Law School professor specializing in mergers & acquisitions, testified last week that the new owners of Astar Air Cargo received such a "bonanza rate of return" from express delivery company DHL Worldwide Express on their recent investment in since renamed "DHL Airways" that DHL has "significant leverage" over Astar's operations.

Gordon was called as an expert witness by FedEx & UPS on the 3rd day of a hearing into whether Astar should have its operating certificate pulled because foreign entities -- DHL Worldwide Express and its parent, the German postal & logistics conglomerate Deutsche Post -- have hidden arrangements to direct the management of Astar. FedEx and UPS claim DHL Airways & Astar violate U.S. foreign ownership restrictions for airlines and that allowing Astar to continue to operate gives Deutsche Post a competitive advantage in the U.S. market because its services are subsidized by the German government.

Gordon said it would almost be impossible for Astar to find other customers quick enough if DHL decided to terminate its long-term lease arrangement for Astar aircraft & transportation service, which would immediately put the company in jeopardy of defaulting on its loans to creditors.

FedEx & UPS suffered setback when Administrative Law Judge Burton Kolko ruled that any evidence related to former DHL Airways investor William Robinson's stock sale is irrelevant in determining whether Astar is owned or controlled by non-U.S. companies. By narrowly framing the case, Kolko is making it more difficult for FedEx & UPS to prove Astar is not independent because the two U.S. logistics integrators allege that Astar adopted the same business model that Airways had with Worldwide Express and that one needs to see the historical transition to understand the current relationship.

 Gordon cited the cost-plus contracts DHL Worldwide Express had with Airways as a similar to the current arrangement that ensures Astar's costs are covered and makes the airline dependent on its benefactor for survival.

***Wow, Gee Whiz ........ as the "Wow" cargo alliance of Japan Airlines Cargo, Lufthansa Cargo, SAS Cargo & Singapore Airlines Cargo is claiming a market share of 20%, making it the world's biggest air cargo alliance to more than 240 destinations, the group says. Since mid-July, each of the 4 carriers have been setting aside up to 10% of capacity on all their aircraft for the express shipments of the other 3 partners. The network was brought about by harmonizing the "JSPEED" express product offered by Japan Airlines Cargo, with "Flash" from Lufthansa Cargo, "SAS Priority" from SAS Cargo & "Swiftrider" from Singapore Airlines.

***British Airways Saudi Shutdown ........ as it has suspended all flights to Saudi Arabia due to heightened security concerns in the region. The decision comes after discussions between the airline and Britain's Department for Transport. At the same time, the airline received confirmation from the U.S. led administration in Iraq that it had been given approval to begin air services to Basra -- Gee, a much safer destination.

***SARS Memories ......... as its effects on the industry are easing. China Southern is back to its pre-SARS transpacific schedule. Cathay Pacific Airways will also be operating a full flight schedule as well as enhanced services to London, and later Auckland, Melbourne & Rome by late Sept. The enhanced services are part of the airline's continued efforts to rebuild Hong Kong's tourism industry & enhance its position as Asia's leading aviation hub. The airline will have restored its full schedule in just three months after being forced to cut services by almost half. About 70% of services were reinstated in July & 90% in Aug. Passenger demand has rebounded sharply, aided by the peak summer travel season & airline initiatives to draw customers back.

***Mercy Cargo ........ as the 1st phase of a U.S. Homeland Security Emergency Air Transportation System (HSEATS) has been successfully created & is now operational. The system is an outgrowth of the 911 tragedy & provides the disaster relief community with a pre-planned, reliable, coordinated system to transport small, priority cargo items, such as blood supplies, and key personnel over a long distance to the site of a disaster. HSEATS program is being created by Mercy Medical Airlift, headquartered in Virginia Beach, VA. The 1st phase involving the states of Delaware, Kentucky, Maryland, Michigan, North Carolina, Ohio, Pennsylvania, Tennessee, West Virginia, Virginia, and the District of Columbia is now operational with a network of 650 planes & pilots. The full national program will be finished by 2005 and involve 5,000 planes & pilots. The system is designed to have pilots & planes ready for takeoff at the nearest airstrip within a matter of a couple hours. HSEATS will be supporting such organizations as state health departments, state police, federal disaster relief agencies and private organizations like the Red Cross, Salvation Army & Southern Baptist disaster relief programs. The HSEATS program operates on a 24/7 basis 365 days a year.

***We Don't Need No Stinking Badges ......... as the U.S. Dept. of Transportation's Federal Aviation Administration (FAA) is issuing new, security-enhanced airman certificates to the nation's 650,000 active pilots. The new credit card-sized certificates are made from composite PVC media card stock & incorporate new security features, such as a hologram of the FAA seal. They will replace the existing paper airman certificates which can be easily damaged or forged.

***Express Carriers Challenge On The Roadway ......... as less-than-truckload carrier Yellow Corp., which is set to become the largest LTL carrier in North America after it acquires Roadway Corp., could find itself facing stiff competition from the parcel sector in coming years because of the changing face of the LTL market, analysts & trucking executives have said. As LTL carriers increasingly blur the lines between the next-day, overnight & long-haul markets to gain market share, they are also opening themselves up to new competition, specifically from FedEx Corp. & United Parcel Service, the analysts said. "The major competitive threats for LTL carriers are UPS & FedEx," said transportation analyst Thomas Albrecht of BB&T Capital Markets in Richmond, VA. In recent years, the LTL market has grown increasingly fragmented as carriers move into nontraditional market segments such as long-haul & next-day markets, Albrecht said.

***Qantas Splits It's Personality ....... as reorganization of the company announced this would see the establishment of at least 8 stand-alone businesses, each with its own management and leadership. Qantas said the reorganization would enable the company to manage constant change more effectively, and drive current and future initiatives to maintain the airline's reputation for excellence. He said the 8 or more businesses would come from 3 areas -- flying businesses; flying services (Maintenance & Airports); and associated businesses (Catering, Freight, Qantas Holidays & Qantas Defense Services). Qantas Catering had been selected as the pilot business segment.

***Continental Record ........ as the airline recorded an all-time record systemwide mainline load factor of 84.5% for July, 5% above last year's July load factor & 3.5% above the previous record set in June 2003. Still, cargo revenue ton miles fell by 4.5% for July, year on year, with the airline hauling 75.41 million tons this July compared to 78.65 million tons during July 2002. 

***Delta Air Logistics Forwards ......... as the air-cargo unit of Delta Air Lines, will make its entire domestic network available to freight forwarders & shippers through a 3rd party online booking service. The service, Global Freight Exchange (GF-X), will apply to Delta's Priority First and DASH cargo services. Delta joined GF-X in Feb. 2002. The airline began offering domestic cargo transport services through GF-X from Atlanta in Feb. and from Los Angeles & San Francisco in May.

***Disabled Parking ........ as the U.S. government fined 3 airlines a total of US$750,000 because they couldn't stow folding wheelchairs inside aircraft cabins, but gave back most of the money so they could improve access for the disabled. America West, JetBlue, & Southwest violated regulations banning discrimination against disabled passengers, the Transportation Dept. said. Other airlines are being investigated for similar violations.

***New LanChile Cargo Home At JFK ....... as it has moved to a new 32,000 square feet in its newly constructed facility, including 1,200 square feet of office space and 20,000 square feet of warehouse space. The import/export warehouse features 18 receiving doors, including one that offers a custom roller system. There is also ramp space to accommodate 2 jumbo aircraft, and a state-of-the-art security system with cameras accessible via the Internet.      

***Calgary Wins Air Conference ....... as it has been selected to host The Int'l Air Cargo Assn.'s (TIACA) Int'l Air Cargo Forum & Exposition in 2006. The biennial event rotates between sites in the Americas, Asia & Europe. Hong Kong hosted ACF 2002 and the 2004 exposition will take place in Bilbao, Spain, hosted by Vitoria Int'l Airport. ACF 2006 will be staged Sept. 12-15 at the Roundup Center, Stampede Park in Calgary.

***Don't Squeeze The Juice! ......... as Air Canada, which axed thousand of jobs & grounded dozens of planes in its struggle to stay aloft, has declared war on lemons, limes & fruit juice to squeeze out a few more dollars in revenues. An internal memo said the airline, Canada's largest & world's number 11, has already saved C$100,000 by halving the number of lemon & lime slices on its flights. Use of bread, chips & chocolate bars is also under the spotlight. The are no present plans to reduce the amount of fuel carried on flights.

***Correction ........ as in our last edition we erroneously reported that Mr. Jed Shapiro had "…sold his interest in TransGroup Int'l." Mr. Shapiro was not an owner or shareholder of TransGroup, but served as a subcontractor to the TransGroup system in IAD. It is that business that was sold. TransGroup immediately established a corporately owned station in the IAD area, having retained key personnel from the prior operation. Established in 1986 & headquartered in Seattle, Washington, TransGroup has more than 30 stations across North America & over 200 affiliates worldwide with North American revenues expected to exceed US$140M this year.                         



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

  4. FF World Ocean Briefs  

***Happy Days? ......... as shipping industry can look forward to brighter days ahead after emerging from a downward cycle, according to Robert Woods, managing director of shipping giant P&O Nedlloyd. In an interview with the Hong Kong Shipping Gazette, Mr. Woods said that container shipping was emerging from the troughs of a depressed market. "Container shipping has passed the bottom of the cycle, in which case profitability should improve going forward," Mr. Woods said. He said it would be better if the cyclic nature of the industry could be reduced, adding the best way of achieving this would be through consolidation. "Through the successful merger of the P&O and Royal Nedlloyd container shipping interests, now over 6 years ago, we have shown that P&O Nedlloyd is culturally suited to acting as a consolidator. This is a further reason for us to look forward to the prospect of consolidation," Woods said. He added that the fundamental problem of liner shipping is that average revenue rates are too low. 

***NVOCCs Delayed On Quest For Parity ......... as the World Shipping Council was granted more time to respond to recent petitions filed to the U.S. Federal Maritime Commission by United Parcel Service & the National Customs Brokers & Forwarders Assn. of America (NCBFAA). The Washington-based World Shipping Council represents most of the world's vessel-operating liner carriers.

The UPS petition, filed to the agency July 25, requests an exemption for the company to have service contract parity with the vessel-operating liner carriers. In the 1998 Ocean Shipping Reform Act, NVOCCs were excluded from negotiating confidential service contracts, while this privilege was granted to the vessel-operating liner carriers VOCCs). On the Web.

The NCBFAA petition, filed to the FMC Aug. 8, called for an exemption to tariff publishing for NVOs. NVOs dispute the benefits of tariff publishing for the shipping industry and the costs imposed upon the industry to maintain tariffs. The FMC extended the comment period for both petitions until Sept. 24. On the Web.

***Korean Carriers Rejoice ....... as they have enjoyed ballooning sales & net profits after levying peak season surcharges (PSS) as well as general rate increases (GRI) to shippers, according to details released by the Korean Ministry of Maritime Affairs & Fisheries. According the ministry's figures, Hanjin Shipping reported sales profits of 77 billion won (US$66M) thanks to favorable container businesses started at the end of last year. These profits were 19 times larger than the 3.9 billion won in same period of last year. Sales marked 2.62 trillion won for an increase of 20% over last year. Hanjin attributed the figures to cargo increases in Asia, including China, sales increases through rates restoration & cost cutting efforts. Hyundai Merchant Marine also reported doubled sales profits, at 87 billion won compared to last year.

***Korea Comes Aboard ........ as Pusan is the 16th Container Security Initiative (CSI) operational port. Other CSI operational ports include Rotterdam, Le Havre, Bremerhaven, Hamburg, Antwerp, Singapore, Yokohama, Hong Kong, Gothenberg, Felixstowe, Genoa, La Spezia, Vancouver, Montreal, & Halifax. Governments representing 19 of the top 20 ports have agreed to implement CSI. The top 20 ports are points of passage for approximately 68% of cargo containers shipped to the U.S.

***New Commish ......... as A. Paul Anderson took his place last week as Commissioner of the Federal Maritime Commission. Anderson, who replaced Commissioner Delmond J.H. Won, received a recess appointment from the White House Aug. 22. His term expires June 30, 2007. The U.S. Senate did not act on his appointment prior to the congressional recess at the beginning of August. Before joining the FMC, Anderson served 9 years as VP of government relations for JM Family Enterprises, an automobile business based in Deerfield Beach, Fla. From 1987 to 1994, he was director of public affairs for Florida's Port Everglades. Perviously he worked as marketing manager for Hvide Marine (now Seabulk). He also spent several years as special assistant to Sen. Paula Hawkins.

***Mediterranean-Canadian Freight Conference Goes Up ........ as it will implement a currency adjustment surcharge, effective Oct. 1. The surcharge will be 6%. For eastbound cargo, the surcharge will amount to a minimum of US$20 per 20-foot container & US$30 per 40-foot container. For westbound cargo, the surcharge will be a minimum US$50 per 20-foot container & US$80 per 40-foot container. The Conference members are Canada Maritime and Cast, divisions of CP Ships (U.K.) Ltd.; Senator Lines; & Zim Israel Navigation.

***USSEC Goes Up ........ as the U.S. South Europe Conference will implement an eastbound general tariff rate increase, effective Oct. 1. The eastbound tariff rate increase for dry containers is US$160 per 20-foot container & US$200 per 40-foot & 45-foot container. For temperature-controlled containers, the eastbound tariff rate increase is US$240 per 20-foot reefer container, & US$300 per 40-foot & 45-foot container. Members of the conference are A.P. Moller-Maersk Sealand, Hapag Lloyd and P&O Nedlloyd.

***Taking Security Seriously ........ as 3 men face the possibility of long jail sentences after pleading guilty to deliberately employing security staff for the Port Everglades cruise terminal who had expired or fraudulent documentation. According to a press statement Edward Ebmeier, Almaida Cetoute & Fritz Victor, have entered guilty pleas arising from their indictment for security violations at Port Everglades. This case was based on an undercover operation in which U.S. Customs agents purchased fraudulent training certificates which were to be used to obtain Class D security guard licenses from the State of Florida to enable individuals to be employed by the defendants' security firm Port Services International as security guards for the cruise ships at Port Everglades Florida. The prosecution said that many employees were working as cruise terminal security guards without even the most rudimentary background checks having been made. Mr. Ebmeier faces up to 11 years' jail and a US$500,000 fine. Defendant's Almaida Cetoute & Fritz Victor face up to 6 years' in prison & a US$250,000 fine.

***Retrenchment ........ as Panama Canal Authority (ACP) says that its modernization & improvement project to deepen the navigational channel in Gatun Lake is 40% complete -- ahead of schedule & within budget. The project's goal is to deepen the channel in the Lake, the large, man-made body of water that all ships navigate when transiting the Canal. Currently, the channel provides an unrestricted draft of 12 meters (39.5 feet), plus 1.5 meters (5 feet) of under keel clearance when Gatun Lake's water level is 25 meters above chart datum. The deepening project would permit the same conditions, but at a lower Lake water level. It's hard to truly comprehend the enormity of this project. Three major pieces of dredging equipment are working 24 hours a day, 7 days a week to complete the project. The US$$190M capital improvement project involves dredging approximately 7 million cubic meters from Gatun Lake & the Gaillard Cut channel, and the dredging of the 52 km long navigational channel from the south end of Gatun Locks to the north end of Pedro Miguel Locks. The project will help to accommodate anticipated increase in Canal demand because the active water storage volume will rise by nearly 45%, to 1,420 million cubic meters, providing enough water for an additional 6 transits per day.

***Mexico's West Coast Gets More Attention ........ as Menlo Worldwide Forwarding (previously called Emery Forwarding) has opened a new office serving the Port of Manzanillo -- Mexico's busiest & largest Pacific port that strategically links Mexico to 74 countries throughout the world. The Port of Manzanillo is 300 km. west of Guadalajara & services 15 states in the Republic of Mexico. It is located next to the state of Jalisco, which has more than 130 Maquiladora plants, as well as a host of major companies representing a wide swath of industries. This is a port to watch.

***Cowtainers For Fidel .........as Crowley Liner Services has transported more than 400 head of cattle, plus sheep and bison, from the U.S. to Havana, Cuba - the 1st shipments of livestock direct from the U.S. in more than 40 years. The 3 livestock shipments originated from Crowley's port facilities in Gulfport, Mississippi, and Port Everglades and Jacksonville, FL. The livestock in these shipments was carried in specially designed, animal-friendly, "cowtainers." These modified FEU containers have open-air windows for ventilation, roof racks for storing hay & water. The animals were purchased from various U.S. companies by Alimport, the Cuban government's food import company, & shipped under the agricultural export exception to the Cuban embargo. The agreements were worked out during the U.S. Food & Agribusiness Exhibition Trade Fair held last year in Havana. Crowley expects to handle additional livestock shipments for the foreseeable future.

***Frosty Deal ......... as LauritzenCool & NYK Reefers will start a cooperation in Jan. 2004 with both a tonnage sharing agreement and NYK Reefers taking a 50% share of LauritzenCool Logistics. This partnership will create economies of scale & sharing of resources as well as increasing the ability to offer even more complex logistic solutions. Each company will continue to market and negotiate their own services, however, vessels out of the combined fleet will be used to optimize and further improve the service to the customers. The combined fleet will comprise more than 70 modern specialized reefer vessels.

***Famous Profie ......... as fast growing Asia Pacific-based NVOCC & freight forwarder Famous Pacific Shipping says that it now has representation in 22 countries, with more than 40 offices worldwide. FPS was established in the early 1990s, when the directors of Famous Freight (Singapore), Pacific Bridge (Hong Kong) and Leo Transport (Thailand) pooled respective networks. In the last year, the FPS network has been responsible for the movement of more than 120,000 TEU, of which around 30% was intra-Asian, 8% transpacific, 11% Australia / New Zealand, 28% Mediterranean & 20% between Asia & Europe (3% for others).

***USS Midway Donated ........ as Acting Secretary of the Navy Hansford T. Johnson has signed the donation contract officially transferring the historic aircraft carrier Midway to the San Diego Aircraft Carrier Museum Before the ship opens to the public next year, SDACM plans to perform work necessary to transform the ship into a museum & memorial. Built at Newport News, the USS Midway was commissioned on Sept. 10, 1945, and has the distinction of being the 1st fleet carrier to be named after a World War II battle. It is the 3rd ship to bear the name "Midway." During 47 years of service, the USS Midway received many awards for the actions of its crew, including the Presidential Unit Citation for outstanding service during the Vietnam War. The Navy donates ships as a way of preserving naval history and tradition. There are currently 46 museum ships displayed in 21 states across the country. USS Midway is expected to arrive from Bremerton, WA in Dec. 2003. On the Web

***Historic Australian Sea Chase ......... as a 3 week chase -- longest in Australian history -- through icy seas at the bottom of the world ended early Aug. 28 when Australian & South African authorities boarded an Uruguayan ship suspected of poaching millions of dollars worth of rare fish. The 40 crew members aboard F/V Viarsa were arrested in Antarctic waters 2,300 miles southwest of Cape Town. Chilean sea bass, also known as Patagonian toothfish - a snow-white, flaky delicacy prized in restaurants in the U.S., Japan & Europe - is overfished, illegally poached and could vanish from the coasts of Antarctica. Australian, British & South African vessels had been dodging icebergs in attempts to catch up with Viarsa since it was spotted inside Australia's Antarctic fishing zone on Aug. 7 near the remote Heard and McDonald islands. Nearly 80% of the Chilean sea bass sold on the world market is illegally obtained, according to the National Environmental Trust in Washington.

***Throughput >> Port of Auckland container volume was up 9% year-on-year to 650,140 TEU for the 12 months to end-July & up 1% on July 2002. >> Port of Boston increased 14% in 1st seven months of 2003, handling 90,117 TEUs, compared to 79,152 TEUs in 1st seven months of 2002. >> Port of Hamburg achieved a 14.9% increase in container handling in 1st half of 2003, the best result compared to all the ports in Northern Europe -- a record 2.9 million TEU handled.

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

1775 - Rhode Island Resolve: Rhode Island delegates to Continental Congress press for creation of Continental Navy to protect the colonies.

1839 - Brig Washington seizes Spanish slaver, Amistad, near Montauk Point, N.Y.

1865 - Civil War ends with naval strength of more than 58,500 men & 600 ships.

1867 - Capt. William Reynolds of Lackawanna raises U.S. flag over Midway Island and took formal possession of these islands for the U.S.

1915 - Navy salvage divers raise F-4, first U.S. submarine sunk in accident.

1916 - Congress passes act for expansion of Navy but most ships not completed until after World War I.

1942 - One hundred twenty women, each commissioned directly as an ensign or lieutenant j.g., reported to "USS Northampton," Smith College for training.

1944 - USS Stingray (SS 186) lands men & supplies on Luzon, Philippines, to support guerilla operations against the Japanese.

1945 - Pacific Fleet ships enter Sagami Bay, near Tokyo, Japan.

1964 - USS Boxer (LPD 4) and two LSDs arrive off coast of Hispaniola to give medical aid to Haiti & Dominican Republic, badly damaged by Hurricane Cleo.

1965 - Cdr. Scott Carpenter & 9 aquanauts enter SeaLab II, 205 ft. below Southern California's waters to conduct underwater living and working tests.

1992 - Navy & Marine forces begin providing disaster relief after Typhoon Omar hit Guam.

1992 - Marines & Army forces begin providing disaster relief in Florida after Hurricane Andrew.

2003 - 'America's Flagship', USS Constellation (CV 64) decommissioned Aug. 6 after 41 years, 9 months & 11 days of naval service in a ceremony at Naval Air Station North Island.                                              


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 & 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!! M/V Sealand Express grounded!!

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 Reports.  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. 

>>> Our Current Photo Feature ..... "Pelicans Peril" -- an amaz-z-z-z-ing story of a container vessel.

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                     

Here are our suggested Websites of the week for your business, your information and your amusement..............

Aircraft Commerce

Bayfront Center for Maritime Studies

CIO Magazine Resourceful 100 Awards

European Business Directory

Bureau of Customs and Border Protection ........ frequently asked questions on "24 Hour Rule."

Health & Overseas Travel

High Speed Vessel SWIFT Joins Mine Warfare Command

Global Trade Management Benchmark Report -- Navigating the Currents of Int'l Trade .......... free report from Aberdeen Group. Study says 40% of enterprises will be using Global Trade Management software solutions by 2005  

Institute of Nautical Archaeology

Int'l Organization For Standardization ......... federation that oversees standards for 13,700 products worldwide to facilitate the Int'l exchange of goods & services.

Latest Cruise Line Gossip

Studies In Supply Chain Excellence

Timber On Deck Cargo Study

The Transportation Directory

Transportation Research Board Newsletter


Law & Regulations of The PRC (English)

"Menlo View" Supply Chain Software

Tele-Atlas Navigation Shop

Tugboat & Towboat Gifts


ASBA/BIMCOAnnual Cargo Conference .......Oct. 23-24, 2003, "Trends in Int'l Commodity Movements", Wyndham Miami Beach Resort Miami Beach, Fl.

2nd Container Shipping Security Conference .......... Sept 9-10, 2003, Stuurboord Conference Center, Antwerp.

14th Annual Break-bulk Conference & Exhibition ....... Sept. 25-27, 2003, New Orleans Marriott in New Orleans, LA.

2003 National Maritime Conference ......... sponsored by American Salvage Assn., Sept. 9-11, 2003, Hyatt Regency, Crystal City Hotel, Crystal City, VA.

Int'l Trade Fair ......... 10-12 Sept. 2003, Cancun, Mexico.

L.A. Harbor Transportation Club 16th Annual Harbor Cruise ............ Thurs., Sept. 11, 2003, honoring the heroes of 9-11& crew of LAFD Marine Task Force. Learn more about the Port f Los Angeles & Port of Long Beach.

Marintec China 2003 .......... 2- 5 Dec, 2003, Shanghai New Int'l Expo Center, Pudong, Shanghai. Both Marintec China & Port China will be held at Shanghai -- world's 4th busiest port & center of the China's maritime industry!

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

Supply Chain Excellence 2003: Procurement & Inventory Strategies Symposium .......... Oct. 17, 2003, Chicago.

World Customs Exhibition On New Technologies ....... Sept. 22-24, in Budapest, hosted by Hungarian Customs at direction of World Customs Organization.

World Maritime Technology Conference ....... 17 - 20 Oct. 2003, San Francisco.

FOR FUN>>>>>>>>>

Jules' Undersea Lodge, Key Largo

Union-Castle Line

Will Rogers Creek ....... how beaches erode, a movie.



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

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

Draft UNCITRAL Instrument On The Carriage of Goods By Sea Act.


Kesel v. United Parcel Service, Inc.

U.S. 9th Circuit Court of Appeals

Aug. 12 2003

RELEASED VALUE DOCTRINE: During a trip to the Ukraine, Kesel purchased several paintings for an exhibition his foundation planned on holding. Kesel instructed an Odessa-based artist, Belik, to ship the paintings through the United Parcel Service (UPS), and insure them for US$60,000. The customs commission in Odessa valued the paintings at US$558, a figure reached by adding up the cost of the materials, not the artistic value of the paintings. UPS refused to insure the paintings for more than $558; nonetheless, Belik shipped the paintings, which subsequently disappeared.   Following the "released value" doctrine, the district court held UPS properly limited its liability to $558 by providing Belik with notice of the limited liability and affording him an opportunity to purchase additional insurance. The court came to this conclusion because of the $100 "released value" that normally applies to shipped items, and the allowance of an additional $458 worth of insurance. The 9th Circuit held that UPS provided Kesel with reasonable notice of limited liability through prominent notices of limited liability printed on the UPS's waybill, Service Guide, & Tariff.   Further, the court found no merit in Kesel's argument that he did not receive notice because of Belik's inability to read English when Kesel is fluent in English & had previously shipped expensive items with UPS. The 9th Circuit also held that by limiting its liability to $558 UPS did not deprive Kesel of proper notice due to its compliance with the "released value doctrine" in limiting the insurance to the value listed on the form presented with the paintings. AFFIRMED

Read The Decision.


In re M/V Bowfin

U.S. 9th Circuit Court of Appeals

Aug. 13, 2003

Admiralty / Limitation of Liability Act: Western Pioneer, owner of the M/V Bowfin, brought a claim against Signature Seafoods, Inc., owner of the barge Lucky Buck, after the Bowfin and the Lucky Buck collided in the Puget Sound.  Under the LLA, a shipowner's liability for unseaworthiness is limited unless the condition of unseaworthiness or act of negligence was within the shipowner's privity of knowledge. The shipowner must prove that the condition or act was not in its privity of

knowledge.  The district court found that spontaneous negligent navigational errors caused the collision, thus the condition or act was outside of the shipowner's privity of knowledge. AFFIRMED. 

Read The Decision.


Morris Vs. T.E. Marine

U.S. 5th Circuit Court of Appeals

Aug. 26, 2003

Civil Procedure: A case that must be read to be believed.

Read The Decision.        


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)


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