Law Offices of Countryman & McDaniel


Air & Ocean Logistics - Customs Broker News

28 April 2004


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." We're celebrating issue No. 400! We greatly appreciate all your kind letters & congratulations -- but our plan to publish your letters has been foiled by technical problems. We hope to revisit this issue again soon, but thanks to all our readers for their congratulations & heart-felt support.

Otherwise - here is what happened in our industry during April 2004.

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 ___________            


 Back To Main Page


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

  1. Freight Forwarder Trade Briefs _____________

***Start Your Engines .......... as the number of orders for durable goods (long-lasting goods) rose 3.4%, led by requests for automobile, metals & business equipment, according to a report released by the Commerce Dept. April 23. The increase pushed the value of durable goods up to US$192.7Bn, Commerce said. Durable goods orders rose 3.8% in Feb. If transportation goods are excluded from the data, the report said that orders rose 3.3%, the largest rise since April 2002. Trucking is a major beneficiary of new industrial orders because factory activity drives requests for transportation services.

***More High Tech To China ...... as the U.S. Commerce Dept. has signed an agreement with China's Ministry of Commerce outlining procedures for so-called "end-use" visits by American export control officials.  In recent years, the Commerce Dept.'s Bureau of Industry & Security has complained about the lack of cooperation from China when it comes to checking whether licensed U.S. exports are being used for their intended purpose. "The understanding resolves a long-standing issue of great importance to the U.S.-China high-technology relationship," the Commerce Dept. said in a statement April 21. "We hope this understanding will enable increased U.S. exports to China of high-technology items."

***South Korea's National Debt Edges Up ....... as it reached 165.7 trillion won (US$142.8Bn) in 2003, compared to 133.6 trillion won the previous year, the Ministry of Finance & Economy said. The amount represents a 32.1 trillion won increase and is equivalent to 23.0% of gross domestic product (GDP). The corresponding figure for the previous year was 22.4%. The ministry said the latest figures are well below the average of 78.2% for member states of the Organization for Economic Cooperation & Development (OECD) during the same timeframe.

***NAFTA Boon To U.S. Agriculture ...... as a senior U.S. Dept. of Agriculture official has told lawmakers the 10-year-old North American Free Trade Agreement has been an "unqualified success" for U.S. agricultural product shippers to Canada & Mexico. Under NAFTA, "markets continue to open & support a freer flow of agricultural products," testified A. Ellen Terpstra, USDA Foreign Agricultural Service administrator, to the Senate Foreign Relations Committee. "Farmers in the 3 NAFTA countries benefit from the reduction of arbitrary & discriminatory trade rules, while consumers enjoy lower prices & more choices." U.S. agricultural commodity shipments to Canada & Mexico reached US$17.2Bn in 2003. "When you compare the performance of U.S. agricultural exports to our NAFTA partners with our export performance to the rest of the world, the difference is even more startling," Terpstra said. She pointed out that in 10 years since NAFTA began, global U.S. agricultural exports increased about US$250M a year because of the generally strong dollar, currency crises, & a global economic slowdown. But NAFTA exports to Canada & Mexico have increased more than US$800M a year for the past 10 years.  "A strong dollar hurt our exports in most of the world's major markets," Terpstra said. "However, in Canada & Mexico, the export losses associated with a strong dollar were more than offset by the export gains generated from significant improvements in market access provided under NAFTA."

***Internal Euro Duty Break ..... as the European Commission has proposed to simplify & liberalize the rules on intra-EU movements of products (mainly alcohol) on which excise duty has already been paid in a Member State. The proposal covers products that have already been subject to excise duty in one Member State & are then transported to another Member State.  Read More.   

***Capitalist Vietnam? ..... as the Ministry of Transport plans to privatize 122 State-owned transportation enterprises by the end of the year as part of a long-term plan to reform the State-run economic sector. According to Minister Dao Dinh Binh, 100 of the enterprises will become joint stock companies, owned by a group of shareholders. The other 22 will become limited companies owned by a single person. Binh said the ministry would restructure its existing corporations into a parent-subsidiary model which will gradually develop into strong groups for air communication, navigation, automobile & shipping industries. Enterprises which have performed poorly or suffering bad debt would either be disbanded or integrated into other companies.

***New "China Gateway" ......... as the U.S. Dept. of Commerce's -- Int'l Trade Admin. (ITA) -- has a new Web page for businesses interested in the new opportunities offered by China's market. The site also provides help in solving trade problems with China through this on-line Trade Compliance Center. The "China Business Guides & Reports" section includes dispute resolution guides, plain language summaries of various trade agreements, trade statistic & more.

***Dumping Down ...... as the World Trade Organization reports that from July 1, 2003 through Dec. 31, 2003, 14 WTO member nations initiated a total of 115 anti-dumping investigations against exports from 30 different countries or customs territories -- a significant decline from the corresponding period of 2002, during which 18 WTO Members initiated 161 anti-dumping investigations. Dumping is the import of goods at a price below the home-market or a 3rd-country price or below the cost of production. China remains at the top of the list of countries subject to anti-dumping investigations, with 30 investigations initiated on its exports during the 2nd semester of 2003, the same number as during the corresponding period of 2002. See document series G/ADP/N/112 .              

***Dumped China Tubes? ....... as the U.S. Commerce Dept. has ruled that color televisions made in China are being dumped on the American market. The Commerce Dept. calculated the dumping margins range up to 78.45%. A dumping margin represents by how much the fair-value price exceeds the dumped price. The imposition of antidumping duties requires final determinations from both the Commerce Dept. and Int'l Trade Commission (ITC) that indeed the Chinese color televisions injure U.S. industry. The ITC plans to make its final determination in May. Meanwhile, U.S. Customs & Border Protection has been instructed to collect cash or a bond on imports of Chinese color televisions equal to the dumping margin. The agency will return the money if the agencies issue a negative determination,  Commerce said. The department recently concluded a parallel dumping case on color television imports from Malaysia, but found that the dumping margin was negligible.

***Softwood Duty Default ....... as WTO arbiters ruled this month the U.S. must reduce one of its duties on US$6Bn of softwood lumber imports from Canada after failing to include certain price data when calculating the levy. The decision applies to the 8.43% duty on Canadian pine, spruce, & fir boards that the U.S. says are being sold abroad for less than their cost of production.

***European Union Food Rules ...... as its new labeling & traceability requirements for foods & feeds containing genetically modified ingredients has American processed food shippers concerned about their competitiveness among European consumers. "These new requirements establish a serious trade barrier that will keep many U.S. food products out of the European market," said the Washington-based National Food Processors Assn., in a statement. "European consumers will see such labels on food products as warning labels."

***Tunnel Shafting ...... as French shareholders sacked the entire British-led board of Eurotunnel Group in a historic corporate upset, then installed their own directors at the debt-laden channel tunnel operator. At a meeting dominated by French small investors who hold 60% of the company, almost 66% of shareholders voted to oust Eurotunnel CEO Richard Shirrefs, chairman Charles Mackay & 9 other board members. The campaign against Eurotunnel management has been waged for years by shareholders' group Adacte, which accused company bosses of failing to attract more travelers & rein in the group's massive debt, which now stands at US$10.8Bn, a loss of US$2.29Bn for 2003.

***Fauna Portals ...... as the U.S. Fish & Wildlife Service announced its intent to designate Houston, TX; Louisville, KY; & Memphis, TN, as official ports of entry for the import & export of live fish & animal products. The agency said the move would decrease the administrative & financial burden on wildlife importers/exporters. The agency currently clears wildlife shipments at 14 locations unless a company seeks a permit & pays the additional cost of having inspectors travel to another port to check a shipment. Importers/exporters can also transship or reroute a shipment under a Customs & Border Protection bond to a designated port of entry, but this is time consuming & delays delivery of goods. The nearest Fish & Wildlife port of entry to Memphis, for example, is New Orleans (402 miles). Your comments can be submitted directly to the agency until May 24. For more information, see Federal Register notice.

***Caviar Caution ...... as the U.S. Fish & Wildlife Service said it would increase protections for the beluga sturgeon by adding the fish to the nation's Endangered Species Act. The listing takes effect 6 months from April 21. Female beluga sturgeon are a prized source for caviar. However, overfishing has helped to fuel an Int'l black market in beluga caviar, especially from countries surrounding the Black & Caspian Seas.

***Beefy Decision ..... as the Mexican government has outlined new requirements for import of U.S. beef products, such as certain meat cuts, veal & tallow. According the U.S. Dept. of Agriculture, which welcomed the announcement, American beef shippers will regain access to a market that accounted for US$746M, or 74% of about US$1Bn in exports, of beef & tallow to Mexico in 2003.  Mexico, along with numerous other countries, banned U.S. beef shipments after discovery of a Washington State cow infected with bovine spongiform encepthalopathy, or "mad cow" disease, in late Dec.  Mexico reopened its market to U.S. boneless beef imports March 3. Read More.

***National Cargo Security Council Grows ..... as the NCSC recently signed its 1,000th member. The Sept. 11 terrorist attacks and a subsequently tighter government-industry security bond helped drive the increase, NCSC officials said in an April 22 statement. "The loss from cargo theft in the U.S. amounts to US$18Bn annually," said NCSC Chairman David Jones, who also is VP of loss prevention & security for Tommy Hilfiger USA Inc. "Our members have coalesced with 27 government agencies & private sector associations to reduce cargo crime and, since 9/11, to protect our borders & assure the safe and secure movement of global trade."

***FASTer Border ..... as the Bureau of Customs & Border Protection has dedicated the "Free & Secure Trade" (FAST) lane at Laredo's World Trade Bridge. Customs describes FAST as a bilateral initiative between the U.S. & Mexico that seeks to ensure security & safety while enhancing the economic prosperity of both countries, providing an expedited clearance program for known low-risk shipments. Under FAST, Mexico & the U.S. have agreed to harmonize their processes for clearance of commercial shipments. In El Paso, where Customs opened a dedicated lane last Oct., truck wait times have been reduced from 2 hours to 20 minutes. 

***Kuehne & Nagel -- A First ........ as the Swiss company received a Class A forwarder's license for its operations in China from the Ministry of Commerce -- and is the 1st global logistics provider to have been granted the right to own 100% of its operating subsidiary in Shanghai. After 12 months, the license will be extended to all of Kuehne & Nagel's representative offices in China. With the new designation, the company will be able to directly provide international forwarding for exhibitions, personal effects & cargo in transit, including NVOCC operations.

***UPS Units Unify .... as "Brown" has named Bob Stoffel to succeed Joe Pyne, who retired, as senior VP of the Supply Chain Group. Stoffel is the head of UPS Supply Chain Solutions, the largest of the 4 business units that compromise the Supply Chain Group. He oversaw the integration of 16 companies that UPS acquired in recent years. As head of the Supply Chain Group, he will also be responsible for UPS Capital Corp., the company's financing arm, UPS Consulting, & UPS Mail Innovations.

***UPS License Plates ....... as the State of Indiana & UPS unveiled a new-look license plate for the company's tractors & trailers. Taking advantage of long-established authority, Indiana has become the 1st state to offer fleet operators the option of specially branded license plates. UPS, which is licensing the majority of its interstate vehicles in Indiana, became the 1st operator to join the state's program. UPS sees the new tags as a way to further highlight the redesigned shield it adopted in a corporate rebranding last year.

***The Apple After Dark ....... as the New York State Dept. of Transportation (NYSDOT) is conducting a study aimed at assessing the feasibility of policies to increase off-peak deliveries (7 PM to 6 AM) to the congested areas of New York City. Shippers, receivers & delivery companies doing business in New York are encouraged to participate in the survey.

***Railroads Must Announce ....... as beginning in July the electronic transmission of cargo information must be reported to U.S. Customs 2 hours prior to arrival at selected border crossings, for security screening, under a new implementation schedule. Customs issued final rules in Dec. requiring freight carriers to pre-file manifest information at different intervals depending on the mode of transportation. Customs computers will analyze the data for anomalies to detect potential smuggling by terrorists. Customs said it will accept rail carrier shipping data through the Rail Automated Manifest System at 31 ports of entry, starting with the 1st 24 crossing stations on July 12. The phased implementation will include 4 more ports in Maine effective Aug. 10 & the final 3 ports -- Tecate & Otay Mesa, Calif., and Presidio, Texas, near Laredo -- on Sept. 9.  For a complete rail compliance schedule.

***Burlington Sues Burlington ....... as a Mississippi River town of crumbling brick buildings in Iowa is taking the Burlington Northern & Santa Fe Railway to court, claiming the railroad violated a 146-year-old contract with the city when it cut more than 350 jobs from the local work force. Burlington's history is intertwined with the railroad that took the town's name. The Burlington & Missouri River Railroad was incorporated in 1852. When Congress established the city of Burlington in 1836, in what was then the Wisconsin Territory, it required that 20 riverfront acres be used for public purposes. Two decades later, the city boosted the growing railroad by letting it use the land at no cost to build a train yard at the spot where a railroad bridge connects Illinois & Iowa. There was a catch:  the 1858 agreement said that in exchange for free use of the land, the railroad must maintain its principal repair shops in Burlington. In the following years, the railroad established the West Burlington shops for that purpose. In their heyday at the end of the 19th century, the shops employed 2,000 workers - blacksmiths, mechanics, machinists and carpenters building & repairing steam locomotives and freight & passenger cars. In 1995, the railroad joined with the Atchison, Topeka and Santa Fe Railway to create the Burlington Northern Santa Fe, now based in Fort Worth, Texas. Last year, the company started to shift its repair work from the West Burlington shops to longtime Santa Fe shops in Topeka, Kan. In Jan. 2003, BNSF laid off 260 workers in Burlington. In Dec., 93 more jobs were moved to Topeka & another shop in Galesburg, Ill. Today, only 44 workers are left at the West Burlington shops. The city sued last month in an Iowa court. The railroad's only response so far has been a motion to move the case to federal court. The Case.

***Canadian Border Missing ...... as the Int'l Boundary Commission, which is responsible for marking and maintaining the U.S.-Canada border, has fallen so far behind with its responsibilities it may never catch up without additional funding, the Associated Press reported. The agency said markers are deteriorating and parts of the border are becoming overgrown by trees & brush to the point the border's location could be lost in some areas. An overgrown border reduces the effectiveness of infrared detection, observation scopes, snowmobiles, all-terrain vehicles & aircraft used for monitoring purposes.

***Rent-A-Hump ...... as the Israeli military is reaching back into history to equip its anti-smuggling patrols on the Israel-Egypt border - it's giving them camels. Camels can go where jeeps & even tanks can't, the military concluded. So it rented camels from a firm that usually hires them out to tourists for jaunts around Israel's southern port of Eilat, the soldiers' weekly Bamahaneh magazine reported. The long, peaceful Israel-Egypt border between the Sinai & Negev deserts is not fortified, and smugglers have taken advantage, moving prostitutes, drugs & weapons into Israel. Up to now, Israeli soldiers have chased them on foot through the sand, sometimes catching the smugglers but often losing them. Therefore, "We have decided to take advantage of the oldest transport vehicle in the world," said Col. Pini Ganon, commander of the border scouting unit.

***Cargo Revenge of The Biker ...... as a British cyclist who slashed almost 2,000 tires after a driver drenched him when driving through a puddle was sentenced to 16 months in prison April 16. Ashley Carpenter, 37, used a sharpened screwdriver to puncture the tires of 548 parked cars & cargo vans over a 10-day period in revenge for the "inconsiderate manner" of motorists. Carpenter told police he began his campaign after one car nearly knocked him down & another drove through a puddle and drenched him.



  2. The Cargo Letter Financial Page ______

**C.H. Robinson Worldwide, Inc. UP as net income increased 15.6% to $29.1M in 1st quarter of 2004 from US$25.1M in Q1 of 2003.

**Continental Airlines. DOWN with a 1st quarter net loss of US$124M, an improvement of 44% compared with same period last year when the carrier posted a net loss of US$221M.

**CN (Canada's biggest railway & North America's 5th largest) UP with earnings of US$154M for the quarter ended March 31, compared with US$185.3M in year-earlier period.

**Hapag-Lloyd. UP with profit of US$211M against US$82M in 2002, on double-digit growth in traffic & surge in liner freight rates.

**J.B. Hunt Transportation. UP with record 1st quarter net earnings of US$33M for 2004, or diluted earnings per share of 40 cents, compared with 2003 Q1 earnings of US$11M, or 14 cents per diluted share.

**Lufthansa Cargo. UP with pretax profits of US$19.4M in 2003.

**Old Dominion Freight Line Inc. (LTL carrier) UP as 1st-quarter net income was US$5.7M or 36 cents per share, compared with US$4.2M or 26 cents a year earlier.

**Orient Overseas (Int'l) Limited (OOIL) (parent of container carrier, OOCL) UP with record net profit of US$329M for 2003 financial year, up 536% over 2002.

**Swift Transportation Co. (FTL carrier) DOWN as 1st quarter was US$6.4M or 8 cents per share, compared with US$8.9M or 10 cents a year earlier.

**UPS. UP as net income for 1st quarter 2004 of US$759M rose 28% from US$593M  in Q1 2003. Operating profit for the Int'l unit increased 101% to US$269M. US exports were up almost 13% with operations in China recording an increase of almost 60% in export volume compared with same quarter 2003.

**U.S. Xpress Enterprises, Inc. UP with net income for 1st quarter of 2004 was US$800,000, or $0.06 per diluted share, compared with net income of US$121,000, or $0.01 per share, in Q1 of 2003.

**UTi Worldwide Inc. UP as net income for the fiscal 2004 4th quarter rose 67% to US$12.2M.

**Wan Hai Lines. UP as net income increased 24% last year, to $130M.                              



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

  3. Freight Forwarder World Air Briefs ___   

***Fuzzy Thinking ....... as the European Parliament passed a resolution challenging an agreement to share airline passenger data with Washington & asked the European Union's top court to rule if the deal violates privacy laws. The vote risks a confrontation with the U.S. that could, at the worst, force cancellation of some trans-Atlantic flights -- stalling the cargo in their holds. Washington says the passenger data ranging from credit card numbers to meal preferences is needed to combat terrorism. If the European Court of Justice rules the deal is illegal, airlines could be subject to legal action for handing over personal passenger data to U.S. customs. But the U.S. has threatened to punish those who don't comply with fines of up to US$6,000 a passenger & the loss of landing rights. The parliament voted 276-260 with 13 abstentions to challenge the deal, which the EU's head office and the U.S. government negotiated in Dec.  Lawmakers urged the European Commission to get more guarantees from Washington on a new long-term passenger data deal, including assurances that data is not shared with other countries or given to business contractors. The temporary arrangement in place between the EU & the U.S. already forces airlines to transfer extensive passenger information within 15 minutes of departure to U.S. authorities. EU & U.S. officials say data collected under the deal will only be used to fight terrorism & other serious crimes, including organized crime.

***American Airlines Pilot Slap ....... as it was ordered by an arbitrator to pay more than US$23M to its pilots union, which claimed the airline improperly subcontracted flights to avoid its labor contract. According to arbitrator, Stephen Goldberg, American must repay the amount it would have paid its pilots for those regional flights. The ruling is final & can't be appealed. The flights operated under the name "American Connection," American's regional carrier, & were thus booked under a different flight code, which technically meant they were not American flights. Pilots for American Connection carriers are paid less than those at American Airlines. The airline halted the booking practice last year, but still owed pilots for the 2 years that the flights were improperly coded.   

***Burning The Stock Certificates ....... as Atlas Air Worldwide Holdings, Inc. (AAWH) & its subsidiaries -- Atlas Air & Polar Air Cargo -- have filed a Debtors' Joint Plan of Reorganization in the U.S. Bankruptcy Court for the Southern District of Florida.  A hearing on confirmation of the plan is expected in July 2004. Under the proposed Plan of Reorganization, all equity interests of AAWH, including its common stock, will be extinguished & will not be recoverable by existing equity holders.

***UPS Satisfied ...... as it was ranked highest in customer satisfaction by J.D. Power & Associates for all types of package delivery, including ground, air & Int'l service segments. The survey of shipping managers ranked UPS well above all industry averages in each segment, particularly in the factors of quality of delivery drivers & customer service representatives. Other areas examined included shipping & delivery service options; competitiveness of pricing; tracking information; communications; invoicing, and quality of primary sales representatives / account executives. The study measures U.S. businesses that have at least 10 employees at a specific location & spend US$10,000 or more annually to ship small packages (up to 150 lbs.).

***More FedEx In China ...... as it has expanded its gateway operations at Hong Kong Int'l Airport (HKIA). FedEx's gateway operations now occupy 37,000 sq. ft., an increase of more than 33% of the previous total area.

***"Toll-way For Extravagance" ...... as Toronto's Pearson Int'l Airport's new terminal is set to open amid warnings from the Int'l Air Transport Assn. (IATA) Director General & CEO, Giovanni Bisignani, that the future of the airport as Canada's largest Int'l gateway is in jeopardy of sinking under the weight of US$4.5M in debt. "The Greater Toronto Airport Authority (GTAA) is completely out of touch with the state of the industry. Airlines worldwide are struggling to cut costs to meet consumer demands for cost-efficient air travel. Instead of building a gateway to North America, we have a toll-way for extravagance," said Mr. Bisignani. By its own calculations, the GTAA will need to increase its revenue from items like parking, concessions & other charges to consumers by 100% in the coming years just to service its debt. Charges to airlines will rise at least 150%.

***Dangerous Cargo ...... as AES Cargo has opened new warehouses & offices at Baghdad Int'l Airport, its 1st permanent presence at the city's central cargo hub. The facilities join AES's trucking distribution warehouse that serves the region, and is adjacent to air unloading that is secured by U.S. military forces. AES, based in Budapest, said the airport warehouse gives it secure storage for shipments, especially when the airport is locked down during times of heightened security. Life insurance out of the question.

***Fastest Track To Vietnam ...... as Air France has launched non-stop flights, becoming the 1st European air carrier to deliver non-stop services from Paris to Hanoi & Ho Chi Minh City. Flights operate on Tues. and Thurs. between Paris & Hanoi, and on Mon., Wed. & Fri. between Paris & Ho Chi Minh City. Air France used to fly from Paris to Vietnam via Bangkok. The non-stop flights will cut total flying time down by more than 3 hours to 8 hours 30 minutes & provide exporters with increased hold capacity of over 3,000 tons of cargo per year.  

***Volumes ....... >> Frankfurt Airport (FRA) reached record highs last month handling 154,248 metric tons, or 7.3% more freight than in March 2003. >> Hong Kong Int'l Airport (HKIA) remained strong last month with a total of 270,000 tons handled, a 13.9% increase over March last year. >> LanChile said cargo traffic improved 14.2% in March to 182.6 million cargo revenue ton kilometers, but cargo load factor decreased to 69.3% because capacity increased 13.4% as airline wet-leased more aircraft. >> Melbourne has outpaced Sydney as the nation's largest exporter of air freight. More than 143,000 metric tons of freight was exported through Melbourne last year, around 10,000 tons more than Sydney. >> Singapore's Changi airport volume in March totaled 156,000 tons, up 7.4% from same month last year            



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

  4. FF World Ocean Briefs  

***CSI On Track ...... as the European Union & the United States signed an agreement in Washington April 22 that paves the way for rapidly expanding to more European ports a U.S. program for identifying containers at high risk of tampering by terrorists. The U.S. will now negotiate directly with the European Commission on how to implement the Container Security Initiative in member European ports, thus ending friction within the EU over bilateral security deals struck between the U.S. & individual countries outside the EU framework. Robert Bonner, commissioner of U.S. Customs & Border Protection, said that the new arrangement could quickly enable the agency to set up CSI programs in 10 to 12 more European ports. A key component of the agreement creates working groups to establish criteria for admitting additional ports in CSI, he said. The agreement is significant because it removes bureaucratic & legal barriers to full cooperation between the 2 largest trading blocs in the world. The agreement formalizes an understanding in principle last Nov. to expand existing mutual assistance in customs matters, including cooperation on container security. The initial agreement had to be approved by the EU Council of Ministers before it could be signed & implemented. "With this agreement we put our enemies on notice that we will work together to protect our people & commercial commerce," said U.S. Dept. of Homeland Security Secretary Tom Ridge. Eighteen countries have declared their intent to participate in the Container Security Initiative, a program launched in the aftermath of the Sept. 11, 2001 terrorist attacks. The program pushes the U.S. cargo inspection process overseas to get a jump on suspicious leads before a dangerous shipping container enters the United States. U.S. Customs officers stationed in non-U.S. ports use shipping data filed by carriers prior to departure to alert the domestic customs administration about which containers to target for X-ray & radiation scans. CBP has inspectors at 18 of 38 foreign ports enlisted in CSI to date, including the European ports of Rotterdam in the Netherlands; Le Havre, France; Bremerhaven & Hamburg, Germany; Antwerp, Belgium; Felixstowe, UK; & Genoa, Italy. Read More.

***Meeting The Threat ...... as Lloyd's Register Group is launching "SeeThreat," a powerful new web-based risk assessment tool which helps ship operators & their company security officers (CSO) to assess the security threat to their ships. The Int'l Ship & Port Facility Security (ISPS) Code becomes mandatory on 1st July 2004. Pressure is building to demonstrate compliance & only some 3% of ships are currently certified. The Code requires CSOs to use their security assessments and "other information" as the basis for advising their ships about the threat levels they may encounter, such as terrorism, piracy, labor disputes & civil unrest.

***Call For Action ...... as "The container supply chains have become very reliable & efficient over the years, but they are under greater threat than ever before, not least due to terrorism, the introduction of new security measures, more extreme weather, piracy, strikes & a growing proliferation of unilateral port state regulations," stated Dr. Hans Payer, External Affairs Adviser to Germanischer Lloyd, at Containerization Int'l's 7th Annual Liner Shipping Conference in London April 22, 2004. The Germanischer Lloyd speaker pointed out that the container shipping industry has it in its own hands to be proactive & introduce measures, through contingency planning, that will reduce the impact of modern threats & help pre-empt the possibility of punitive legislation. Such measures include building alternative discharge ports into voyage plans; continued development of weather routing technologies, container lashing systems & modified ship designs; routing ships away from potential trouble spots; & improving communications all along the container transport chain. On ship design, Germanischer Lloyd has significantly increased the design loads for container ships with large bow flare & has instructed ship-owners & operators to pay attention to the danger of collision.  "Implementation of these contingency measures, as well as strict compliance with the new Int'l Ship & Port Facility Security Code and greater cooperation between industry & government on new rulemaking initiatives, will help containerization achieve & retain its full potential," concluded Dr. Payer. "The container ship fleet, with 3,200 fully cellular vessels totaling 60 million gross tons (gt), is the fastest growing sector in world shipping. The container ship fleet now accounts for more than 12% of the merchant tonnage worldwide, up from 5% only 8 years ago. Approximately 75% of general cargo is already containerized, & this share is expected to grow to more than 90% by 2010."

***FMC Liberalizes China Tariffs ...... as it has granted exemptions from the Controlled Carrier Act for 3 Chinese liner companies. The exemption will allow COSCO, China Shipping Container Lines & Sinotrans Container Lines to change tariff rates on a day's notice. Under the controlled-carrier law, foreign carriers had to wait 30 days to effect any tariff rate changes.

***FMC Solution For China Bonds ...... as it has published its final rule for the NVOCC optional bond riders to provide proof of financial responsibility to operate in China. China's Ministry of Communications implemented new Int'l maritime regulations early last year that called for a US$96,000 deposit in order to collect fines & penalties from U.S. NVOs that violate the rules. The National Customs Brokers & Forwarders Assn. of America petitioned the FMC to develop the bond rider regulations to both ease the financial burdens on small NVOs and comply with China's new Int'l maritime rules. Effective April 6, licensed NVOs are able to secure a US$21,000 rider on their existing US$75,000 bonds with the FMC.

***Smart Idea .......... as 2 new Maritime Smart Container market, technology & product research reports released by Homeland Security Research Corp. (HSRC), in collaboration with Michael Wolfe's North River Consulting Group (NRCG), reach an encouraging conclusion: deploying the new technology called Smart Containers can increase the security of containers against terror attacks & generate productivity benefits for the economy and profits for shippers, carriers & others. The reports conclude that, as the technology matures & is put to effective use, it will generate benefits for industry & save the U.S. economy more than US$10Bn per year -- from fewer delayed & misrouted shipments, improved just-in-time reliability, reduced inventories, better container, chassis, and terminal efficiency, reduced theft & insurance costs - in addition to reduced vulnerability to container-borne terror attack. Future Smart Containers will incorporate anti-tampering, intrusion & condition detection, tracking, communications & elements that will give supply chain stakeholders a real time picture of the location & status of their shipments and carriers better control of their equipment.

***Box Warning ........ as growth in cargo traffic & rising prices for steel are leading to a shortage of maritime containers, according to Asian ocean carriers, lessors & equipment management specialists. The equipment shortage could have an adverse impact on the movement of Asian cargo during the peak season this summer, & is already increasing the costs of ocean carriers. Carrier delegates of the Asian Shipowners' Forum, who met in Tokyo April 9, expressed "concerns about rapidly increasing cost factors, such as a lack of containers due to a shortage of steel plates."

***Canadian Tug Strike Ends ...... as tugs were back at work April 24 after a deal was reached to end an 8 day labor dispute that paralyzed some ports along the B.C. coast. Representatives from companies in the Council of Marine Carriers & members of the Canadian Merchant Service Guild met April 24 & agreed to end the dispute, which cost the Port of Vancouver US$100M. The deal, reached April 23 via work of federal mediator Bill Lewis, calls for annual wage hikes of 3% over each of the 3 years of the contract as well as benefits equivalent to a 5.5% wage increase, totaling 14.5%. New agreement is retroactive to Oct. 1.  It is believed the union was seeking a 17% raise in wages & benefits while the council was offering 13.75%. About 600 tug officers went on strike April 16, affecting an estimated 80% of the tug & barge service & ship docking along the B.C. coast. Rail service provider Canadian Pacific reported having a total of 39,000 feet of rail cars piled up at docks in Vancouver, with 3,500 more cars on the way as of April 22. Settled, but still a mess.

***Short Sea Approval ...... as the European Commission has decided not to raise any objection to the UK Waterborne Freight Grant (WFG) aid scheme which will encourage the modal shift of freight from road to water by granting aid to new/existing coastal, short sea, or inland waterway services provided that they avoid lorry journeys & that they generate environmental benefits within UK. Read More.

***Have We Seen The Mother Ship?..... as the Journal of Commerce reports that the race to build ever-larger container ships may be reaching its practical limit as vessel designs top out at 12,000 TEUs. When container ships get too big, they have operational & commercial limitations that reduce their effectiveness, said Neil Davidson, director of Drewry Shipping Consultants Ltd. in London. Shipping lines last year began to introduce 8,000-TEU vessels into the Asia-Europe trade, & OOCL's M/V Hamburg became the 1st mega-ship to call in the U.S. By the end of the year, 4 services with 8,000-TEU ships will be calling on the West Coast. Carriers have ordered more than 140 vessels of 8,000-9,500-TEU capacity to be delivered through 2007. Technically, there is no limit to how large container ships can be built, although ships of more than 12,000 TEUs require a 2nd engine, making them quite costly to build & operate. "The real limit on ship size is commercial," Davidson told Navis World 2004 in San Francisco.

***Big Taiwan Container Buys ......... as Evergreen, Yang Ming & Wan Hai, have ordered 54 container vessels between them from various shipyards worth US$4Bn.  Evergreen ordered 40 vessels, of which more than half have a capacity of 7,000 TEU -- the rest at 5,000-TEU capacities -- plus 10 newbuildings under construction. Yang Ming ordered 10 vessels, with 12 vessels under construction, 4 of which have 8,000 TEU capacities. Wan Hai has ordered 4 5,000 TEU vessels.

**The Giants Visit ...... as CMA CGM & Mediterranean Shipping Co. plan to introduce a weekly service with 8,100-TEU giants between Asia & the U.S. West Coast port of Long Beach later this year. The 1st sailing will be that of the M/V CMA CGM Hugo -- 1,096 ft. long &140 ft.wide -- on Aug. 23. Five new 8,100-TEU will gradually replace ships of about 4,000-TEU capacity currently employed in CMA CGM's "TPX" transpacific service. They will call at ports of South China & California. The CMA CGM/MSC service will employ some of the largest containerships to call at ports in the U.S. Until now, 8,000-TEU-type vessels have generally operated in the Asia/Europe trade, with the exception of Maersk Sealand's "S-class" mega-containerships.

***Instant SOS Requirement ....... as IMO Safety of Life at Sea (SOLAS) Resolution XI-2/6 & USCG Regulation 2003-14749 requires every vessel 500 gross tons or larger that seeks to enter a U.S. port after July 1, 2004, be equipped with the means to send an instant distress & alert signal in response to an act or terrorism, hijacking, or piracy. Commercial vessels failing to meet this requirement will be denied entry to U.S. ports of call, raising the specter of a disruption in Int'l shipping to and from the U.S.  One solution is eTrac SSAS --  press 1 of the 2 panic buttons to instantly send an alert containing such information as vessel identification, time, & precise location to both the Maritime Rescue Coordinator Center and a 2nd shore-based recipient selected by the vessel operator.

***New Virginia Terminal ....... as APM Terminals, a subsidiary of Maersk Sealand shipping line, will spend US$450M to construct "a 300-acre terminal" in Portsmouth, Virginia over the next 3.5 years. The terminal, which is forecasted to be able to handle up to 500,000 containers a year, will be one of the largest in Virginia according to the state's Governor, Mark Warner. The new project will be the first terminal built in the U.S. using private money. Construction is to start later this year, with the terminal expected to open in 2007.

***Trouble In The Other World ...... as we think our sophisticated container world "knows all" -- but who knew that more than 500 cargo vessels were trapped in the Hangzhou section of the Beijing-Hangzhou Grand Canal due to shallow waters in an usually dry season, April 14, 2004?.

***Winds of Change ...... as Japan's Mitsui O.S.K. Lines carried out 1st trial of a wind power generator aboard wood chip carrier M/V Taiho Maru, in conjunction with the Tokai University Research Institute of Science & Technology, and Nishishiba Electric Co. Ltd. The 3kW-rated trial windmill device powered the ship's bridge air conditioning during a voyage from Japan to Australia. The Japanese group envisages that it may be used on a wider range of vessels as an environmentally friendly supplemental power source for the crew quarters in the future. 

***Ocean Resources Going For The Zinc ........ as it reports its research & recovery vessel, M/V Ocean Boomer, is currently undergoing modifications in Liverpool, England to accommodate proprietary cargo recovery systems to be used to lift commodity metals from shipwreck sites. Ocean Resources Recovery Systems will feature one-of-a-kind proprietary deep sea recovery capabilities.

***Meet Mr. Li Ka-shing ...... as the tycoon is not only Asia's richest man, but also helms the world's biggest shipping container business. In 2003, Mr. Li's maritime concerns handled 13% of all containers worldwide, a recent Forbes Magazine report said, and have presences at 32 ports in 15 countries. UK-based Drewry Shipping Consultants estimates Mr. Li has invested a whopping US$1.5Bn since 2000 to purchase 15 shipping container terminals around the globe. Drewry says that 42% of all containerized cargo from China leaves through Mr. Li's terminals, a remarkable feat given only 12 years have passed since he made his 1st investment in mainland China with the acquisition of a stake in Shanghai's port. The Forbes story said Hutchison Port Holdings has become the billionaire's biggest money spinning operation amid soaring Int'l demand for exports from China. Geeez - 12 years!

***Sad Encounter ...... as when the NYK container M/V California Mercury arrived at Port of Los Angeles April 16, the crew didn't realize they had a dead 47-foot fin whale stuck on their bow. The ship struck & killed the whale at sea, wrapping him around the bow, according to the Cunningham Report.

***zNose Knows ........ as Electronic Sensor Technology has a new antiterrorist technology based upon its commercial electronic nose, the zNose -- sensitive enough to sniff out & recognize suspicious odors such as explosives, drugs, chemical weapons, & even money in cargo containers. The zNose has applied for certification as an antiterrorist technology by the Office of Homeland Security. The zNose is able to quantitatively separate & measure the chemistry of any fragrance, odor, vapor or smell with part per-trillion sensitivity in 10 seconds. Unlike trace detection technology, electronic noses can be trained to easily recognize an unlimited number of both single-chemical & multi-chemical compound odors.

***OTI License Revocations ....... as the U.S. Federal Maritime Commission has revoked 16 ocean transportation intermediary licenses for failure to maintain valid bonds >> AACCO, Wilmington, CA; A.C.C. Logistics Ltd., NY; B&C Shipping Line Corp., Miami; Beacon Int'l, Port Reading, NJ; CJ Int'l, Louisville, Ky.; Centroline, Hialeah, Fla.; Container Port Services, Houston; Freight Express Int'l, Miami; Interstar, Humble, Texas; Intertainer Line, Humble, TX; MB Cargo, Miami; Ned Shipping Co., Washington; Principal Container Line, Houston; Swiftpak, Miramar, FL.; TMX Logistics, Miami; Trinforwarding Int'l, Miami; & U.S. National Lines, Jamaica, NY

***Singing In Bayonne ......... as a former leader of an Int'l Longshoremen's Assn. local due to be sentenced next week on corruption charges may escape jail time because of his cooperation with a federal investigation into organized crime. John Angelone, president of Local 1588 in Bayonne, NJ, from 1994-2001, pleaded guilty to being part of a conspiracy to embezzle more than US$500,000 from the union. He testified as a government witness in the 2001 trial of Joseph Lore, a former waterfront hiring agent identified as an associate of the Genovese crime family, & 4 other defendants linked to the trial.

***Hello Kitty ....... as a Tampa business owner opening a shipment of merchandise from China got an additional item he didn't expect - a severely undernourished cat. The female cat, named "China" by staff members, weighed just over 3 pounds after being trapped in the container for the month long trip. Norman Goldberg, owner of Quality Discount Cages, said he discovered the cat when he received the shipment of bird cages at his warehouse. The traveling feline began her journey at a China factory where workers loaded parrot cages into a 1 x 40' container in early March. The container arrived in Los Angeles on April 1 & then railed to Tampa. E-mail to the factory brought response:  "You gave us a very big surprise today. We are very happy to know our cat still alive."

***Ratting Out Mickey ...... as the Int'l Longshoremen's Assn. sued the Disney Cruise Line & Canaveral Port Authority in federal court March 21 after Disney banned the image of "Moe the Rat" during protests at the Disney cruise ship terminal. Disney officials object to the rat's image, saying it makes a mockery of Mickey. When Disney's ships Magic or Wonder arrived in port, picketers were usually there to greet passengers with a 15-foot high statue of Moe & leaflets with his image. The union has been protesting Disney's hiring of a contractor that has not reached a collective bargaining agreement with its cruise ship employees.

***D-Day Anniversary Cruise ....... as on Sun. June 6, 2004, the historic WW II Liberty Ship SS Jeremiah O'Brien will make a special cruise on San Francisco Bay to commemorate the 60th Anniversary of D-Day. Boarding from SF Pier 45 Fisherman's Wharf at 9 a.m., the cruise features continental breakfast, barbecue lunch, live music, military vehicle exhibit, WWII aircraft flybys & a Silent Auction. In addition, dignitaries from France, Canada, the UK & the U.S. will lay a wreath in waters outside the Golden Gate in memory of those lost in battle. Jeremiah O'Brien was at Omaha Beach on June 6, 1944 & is sole still-active survivor of the 5,000-ship D-Day armada. Passengers may tour the ship including engine spaces, crew quarters & bridge. Tickets are US$125 per person. Call 415 544-0100 or Website.

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

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

1861 - USS Saratoga captures the slaver Nightingale.

1861 - The Civil War begins when Confederates fire on Fort Sumter, S.C.

1862 - Union naval forces occupy New Orleans, La.

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

1914 - 1st combat observation mission by Navy plane, at Veracruz, Mexico. 

1915 - 1st Navy contract for lighter-than-air craft is awarded.

1943 - Re-establishment of Commodore rank.

1950 - An unarmed Navy patrol aircraft is shot down over Baltic Sea by the Soviet Union.

1972 - Moonwalk in Descartes Highlands by Navy John W. Young, commander of Apollo 16 -- 9th man to walk on the moon. 

***Throughput ......... >> Los Angeles' inbound loaded container traffic rose 14% in March to about 334,500 TEUs, marking the return of growth at the Californian port -- but remember - Port of Long Beach is just next door where throughput soared 31% in March to 235,500 TEUs, as the Californian ports renewed their patterns of growth.                                               


   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!!

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. 

See our current photo feature for: "Super Loss"

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 world wide web sites of the week for your business, your information & your amusement..............

Action Urged To Combat Cargo Theft.

Assoc. of Ship Brokers & Agents ........ distance maritime learning

B-757 Cargo Conversions

Business Trends In The Logistics Market ........ from DHL.

Final Voyage of The U-505 Submarine

History of Containerazation In Japan

"Hours of Service" Regulations ........ effect on freight rates

Local Yellow Pages & Maps ......... international

Massachusetts Maritime Academy

Naval Medicine Expands Malaria Vaccine Development Efforts

Opinion: Need For Cargo Theft Data

Privacy Right & RFID

Review of Maritime Transport ...... annual publication prepared by UNCTAD's Trade Logistics Branch, provides comprehensive statistics & information on maritime services

The Impact of Free Trade on Logistics ........ June 21, Washington, DC, National Industrial Transportation League

The Problem With Spyware

Proposed Hague Choice of Court Treaty In Business-to-Business Contracts

U.S. Dept. of Agriculture (USDA) ...... free, database of 3,800 U.S. agriculture exporters & their products in 500 product categories   

U.S.-Morocco Free Trade Agreement ......... the newest FTA & More

U.S. Navy Sealift Fleet

U.S. Surface Transportation Board ........ new site includes live feed of board meetings

What Everyone Should Know About Supply Chain Management

Who Owns That Data?


GE VeriWise Platform ......... asset-tracking & security device for over-the-road trailers

Varsity Logistics launches ShipSoft 2.5 ........ parcel and freight shipping software


Transport Events

8th Annual Northeast Trade & Transportation Conference 2004 ....... 12-14 May, Newport, RI

13th Annual Int'l Air Cargo Conference & Exhibit- Gulfport-Biloxi 2004 ......... 10-13 May, at Beau Rivage Resort, Biloxi, Mississippi -- 172 exhibitors including airports, airlines, express air carriers, forwarders, motor carriers, consolidators, integrators & security. Thousands of shippers, manufacturers, distributors & custom brokers from around the globe.

15th Annual BreakBulk Conference & Exhibition ....... Sept. 15-17, 2004, New Orleans Marriott in New Orleans, LA.

2004 SNAME Maritime Technology Conference & Expo ........ Sept. 30 to Oct. 1, Washington Hilton, Washington, DC.

CMI 38th Conference ......... May 31 to June 4, 2004, Comité Maritime Int'l, Vancouver, BC, Canada.

Forum for Motor Carrier General Counsels ........ July 25-28 at The Lodge at Vail, Vail, CO.

L.A. Harbor Transportation Club Annual Golf Tournament .......... Fri, May 28, 2004, California Country Club, Whittier, CA 90601.

Logistics Hong Kong ........ May 18 to 20 2004, Hong Kong Convention & Exhibition Center

MARSEC-CON '04 ....... May 16 to 18, 2004, California Maritime Academy, Vallejo, CA.

National Cargo Security Council's 2004 Annual Conference ....... June 12-16, Riviera Hotel, Las Vegas, Nev. Marine Lt. Col. Oliver North will address opening session on June 14. Army Major General Dennis K. Jackson, former head of logistics in both Afghanistan & Iraq, to address awards banquet.

Pacific Homeland Security & Natural Disasters Conference and Expo ....... Oct.5-6, 2004, Marriott City Center, Oakland.

Terminal Operators Conf. & Exhibition ......... June 2004, Barcelona, Spain.

UN Conf. On Trade & Development -- UNCTAD ....... conference to set priorities & guidelines every 4 years. UNCTAD XI is 13-18 June 2004 in São Paulo, Brazil & will focus on enhancing coherence between national development strategies & global economic processes, particularly for developing countries. Alternate Site .

U.S. Maritime Security Expo ........ Sept. 14-15, Jacob Javits Convention Center, New York.

FOR FUN>>>>>>>>>

Auction ....... decorative stand included.

Chicken Alert

For The Truly Paranoid

New Weapon Could Be Deployed At Sea

Where Will Cameron Take You?



OUR "E" Section***

7. New Transport Related Legal Cases*** 


United States v. Flores-Montano

United States Supreme Court

No. 02-1794 April 2004

U.S. Customs officers could search gas tank of vehicle crossing a U.S. border without having reasonable suspicion. The high court quoted, in a footnote to its 9-0 ruling, a pertinent part of 46 Stat. 747, 19 U.S.C. 1581(a): "Any officer of the customs may at any time go on board ... any vessel or vehicle at any place in the U.S. or within the customs waters." U.S. Customs & Border Protection Commissioner Robert C. Bonner said the decision would prove "vital to our mission" of intercepting terrorists. Bonner said that Supreme Court's decision also applies to searches of containers at ports. In the case at hand, the high court broadened "the government's authority to conduct suspicionless inspections." The court added in a concluding footnote: "We think it clear that delays of 1 to 2 hours at Int'l borders are to be expected."

Schramm, Inc. Vs. Shipco Transport, Inc.

U.S. Court of Appeals for the 4th Circuit

No. 03-1075 April 15, 2004

The US$500 per package limitation in the Carriage of Goods at Sea Act (COGSA) [Title 46 USC] applies during restowage of cargo at intermediate ports, even where the damage occurs ashore. In the instant case, plaintiff cargo owner contracted with carrier for transport of cargo from Baltimore to Arica, Chile. Carrier issued a clean bill of lading incorporating COGSA. During an intermediate stop of the ship in Charleston, the master decided to restow the cargo below deck and had it off-loaded in preparation for restowage. While on the pier, the cargo was damaged beyond repair. Plaintiff owner sued the carrier for replacement cost of the cargo. The court held that the COGSA limitation applied from the time the goods are initially loaded at the port of embarkation until they are finally discharged from the ship at the port of disembarkation. Restowage does not constitute a discharge. Opinon.

Adams Vs. Unione Mediterranea di Sicurta

U.S. Court of Appeals for the 5th Circuit

No. 03-30026 April 14, 2004

Long decision regarding a lengthy & complicated litigation involving personal jurisdiction, venue, cargo insurance, coinsurance, salvage, & subrogation. Opinon.  

Howard Vs. Southern Illinois Riverboat Casino Cruises.

U.S. Court of Appeals for the 7th Circuit

No. 02-3818  April 9, 2004

For purposes of the Jones Act, permanently moored dockside casino is not a vessel in navigation & its employees are not seamen entitled to protection under the Act. Opinion.

Nova Information System, Inc. Vs. Greenwich Ins. Co.

U.S. Court of Appeals for the 11th Circuit

No. 03-10218  April 9, 2004

FMC Bond: After cruise line went bankrupt, the credit card processing company is not entitled to reimbursement by the surety that issued the Federal Maritime Commission (FMC) non-performance bond. Premier Cruise Lines had arranged through an intermediary bank for plaintiff financial institution to serve as its merchant bank for passenger tickets purchased by means of credit cards. Defendant insurance company provided the financial guarantee required by the FMC that prospective passengers would be eligible for reimbursement in the event of non-performance by Premier. When Premier filed for bankruptcy & ceased operation, the vast majority of prospective passengers sought and obtained reimbursement from their credit card companies, which then sought and obtained reimbursement from plaintiff credit card processing company. Plaintiff then sought reimbursement from defendant, alleging a variety of contractual & equitable grounds. The court affirmed the trial court's decision that the obligations of the credit card processing company and the financial guarantor were separate & distinct and that the financial guarantor owed no monies to the credit card processing company. Opinion

Siemens Vs.. Schenker

High Court of Australia

Liability for Cargo damaged during transfer from airport to forwarder's warehouse: Siemens was not entitled to full damages for the loss of its expensive telecommunications equipment, but could only receive limitation amount calculated on the basis of the air freight limitation of US$20 per kilo, by force of HAWB contract while cargo off airport. Both the plaintiff & defense lawyers are our respected friends. This said, the result was proper. Opinion.         


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)

Libby Thompson (Countryman & McDaniel)


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