Law Offices of Countryman & McDaniel


Air & Ocean Logistics - Customs Broker News

31 May 2004


Good Monday 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." Here's what happened in our industry during May 2004.

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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 _____________

***China World's #3 Importer ..... as it has overtaken Japan as the 3rd-largest importing country in the world, according to the World Trade Organization. As imports surged by 40%, China became the 3rd-largest merchandise importer in the world, ahead of Japan & only behind the European Union & the U.S. Worldwide merchandise exports rose 16% in value in 2003, to a new record level of US$7.3 trillion. More than 66% of this increase was due to dollar price changes, rather than higher volumes.

***China's 2nd Largest Export ...... as exports of hi-tech products will reach US$150Bn this year, according to the Vice Minister of Commerce, Wei Jianguo. Speaking at a press conference at the Suzhou Electronic Information Exhibition on May 11, Mr. Wei said China's export of hi-tech products has grown from US$24.7Bn in 1999 to US$110.4B in 2003. It has become the 2nd largest export item from China, surpassing garments. In 1st quarter, hi-tech product exports amounted to US$33.1Bn, representing an increase of 67.5% over same period last year. In March, export of such products generated US$12.82Bn, up 74.3%.

***U.S. Durable Down, But Trend Good .... as U.S. orders for long-lasting manufactured goods fell 2.9% in April, breaking a string of 2 consecutive gains in the indicator of future factory activity, the Commerce Dept. announced -- decline in orders for aircraft & automobiles, which fell 3.2% & 9.7% respectively, led the decline. Excluding orders for transport equipment, which dropped 4.7% overall, orders for durable goods slipped 2.1% during the month. Analysts told Bloomberg News that after strong gains the previous 2 months, it was not unexpected that durable goods orders fell, but that "the basic trend is positive."

***New U.S. & Australia Bond .... as this moth they signed a Free Trade Agreement (FTA) in Washington, DC. Negotiations on the treaty began last March in Canberra. U.S. Trade Representative Robert Zoellick said he hoped the Congress would approve the legislation before its Aug. recess, bringing the treaty into force on 1 Jan. 2005. According to Robert Hunt, of Invest Australia, an Australian gov't. agency, the agreement will encompass "the virtual elimination of tariffs, except on beef, dairy & sugar... It's probably the most comprehensive agreement anywhere by any 2 countries.'

***Kingdom of Nepal Is No. 147 ........ as this month it is the 147th Member of the World Trade Organization (WTO). Nepal started its accession negotiations in 1989 & it's accession package was approved by the 5th WTO Ministerial Conference at Cancun, Mexico, on Sept. 11, 2003. Another 24 countries are in the process of negotiation to become WTO members: Algeria; Azerbaijan, Andorra; Lao People's Democratic Republic; Samoa, Lebanese Republic; Bosnia Herzegovina; Bhutan; Cape Verde; Yemen, Serbia & Montenegro; Bahamas; Ethiopia; Kazakhstan; Russian Federation; Saudi Arabia; Belarus; Ukraine; Sudan, Uzbekistan; Vietnam; Seychelles; Tonga; Kazakhstan; & Tajikistan.  

***U.S. Durum Farmers Say Viva! ..... as especially those in the Upper Midwest favor increased exports of their product to Cuba. Cuba recently imported 220,000 bushels of U.S. durum, a main ingredient for pasta, from the U.S. Durum farmers believe the market to Cuba could reach as high as 700,000 bushels a year. Agricultural trade between the U.S. & Cuba reopened in Nov. 2001 following the devastation of Hurricane Michelle on the island. But when the general embargo ends -- get ready!

***The Little Engines That Can ...... as dozens of small & poor countries aren't reporting on their efforts to fight al-Qaida & the Taliban because they don't have the money or they're confused about how to do it, U.N. officials said. The U.N. sanctions monitoring committee, which started work after the Sept. 11, 2001 terror attacks, said it's concerned about disturbing new trends in financing for the terrorists, including use of import & export companies, criminal smuggling networks & kidnapping. Last month, the sanctions committee named 68 countries that didn't meet a March 31 deadline on what they are doing to implement sanctions against al-Qaida & Taliban that include freezing assets, a travel ban & an arms embargo. The sanctions were imposed in Jan. under a U.N. resolution. "Our preliminary conclusion is that it's not lack of political will but rather lack of resources," said the U.N. Security Council. Comments came as the Int'l Institute of Strategic Studies in London released a report saying that al-Qaida has more than 18,000 potential terrorists scattered around the world & is probably working on plans for major attacks on the U.S. & Europe.

***Dept. of Homeland Security Will See Them .... as it is on the verge of awarding a contract for a system that would track visitors before they arrive in the U.S. The program, known as US-Visit, seeks to supplant the nation's physical borders with virtual borders. The borders would employ networks of databases & biometric sensors for identification at sites where people seek visas. The company that wins the contract would be asked to develop a standard for identifying visitors using tools such as fingerprints, iris scanning, facial recognition & radio-frequency chips. Under the program, visitors arriving at U.S. checkpoints would face instantaneous authentication to confirm their identity & then determine if they leave on time... unless they just walk across from Mexico.

***U.S. Customs & Border Protection To Japan ..... as CBP officers were deployed to the Port of Tokyo on May 21, 2004, as part of the Container Security Initiative (CSI). Tokyo thus becomes the 19th port worldwide to become fully operational under the CSI Program.

***Office of Foreign Assets Control Says -- Be Careful .... as OFAC has updated its List of Blocked Persons, specially designated nationals, specially designated terrorists, specially designated global terrorists, foreign terrorist organizations, & specially designated narcotics traffickers ("bad guys"). It is a violation of U.S. law for persons subject to U.S. jurisdiction to engage in economic transactions with "bad guys" or organizations on these lists. Is your brother-in-law on the list? The list:

***Slowing Down The Drive Through Window .....as the Food & Drug Administration (FDA) is extending, until July 13, the comment period on its interim rule regarding prior notice of imported food. Your comments?

***U.S. Government Aids Developing Nations ..... as 16 countries are named to receive monetary help from a new assistance program, in place of traditional aid programs -- Armenia, Benin, Bolivia, Cape Verde, Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia, Mozambique, Nicaragua, Senegal, Sri Lanka, & Vanuata. These countries were picked for the program based on their governance, social investment & economic freedoms. The program, the Millennium Challenge Account, which is overseen by the newly formed Millennium Challenge Corp., was established by the Bush administration in 2002 to help poor countries spur economic growth & attract foreign investment. Congress appropriated US$1Bn for the program the 2004 fiscal year. The program unnerves U.S.-flag vessel operators because it may eventually reduce the amount of aid cargoes they transport overseas each year, but the Bush administration insists it will continue to provide funding to traditional food aid programs.

***UPS Supply Chain Solutions' New Solution ..... as it has a new service that helps companies properly manage the disposition of used & obsolete electronic goods & components. Through its new Asset Recovery & Recycling Management service, UPS-SCS oversees the final disposition of these electronics through repair, recycling or disposal in an environmentally safe manner, all while controlling logistics-related activities. The new service tackles the growing problem of how to manage used & obsolete electronic goods, such as computers, cell phones, printers as well as their electronic components. According to the Int'l Assn. of Electronics Recyclers' (IAER) 2003 industry report, "there are more than 500 million units of computer equipment (CPUs, monitors, printers) currently installed in the USA from all sectors, including consumer, that will be obsolete in less than 5 years." IAER also cites a U.S. Environmental Protection Agency report from 2002 stating "91% of consumer electronics is discarded." UPS Supply Chain Solutions also offers resale & remarketing services.

***FedEx Freight Goes Up ....... as the LTL unit will implement a 5.9% general rate increase effective June 14. The increase would apply to interstate & intrastate traffic, and selected shipments between the U.S. and Mexico & Canada.

***U.S. Motor Haul Is Up .... as the American Trucking Assn.s' advanced seasonally adjusted Truck Tonnage Index increased 2.2% to a record high 160.8 (1993=100) in April. April's improvement was the 3rd straight increase and the 7th in the last 8 months. In March, the tonnage index rose 1.6%. From March to April, the unadjusted index actually fell 4.2% as less freight is traditionally hauled in the 4th month of the year versus the previous month. Compared to April 2003, the unadjusted index jumped 6.1%. Year-to-date, compared to same period 2003, truck tonnage was up a hearty 6.7%. Trucks hauled 9.0 billion tons of freight in 2003, or 68.9% of tonnage carried by all modes of domestic transportation. Motor carriers collected US$610Bn, or 86.9% of total revenue earned by all transport modes.

***U.S. Intermodal Rail Traffic Up .....as volume totaled 210,909 trailers or containers in the week ended May 15, up 7.9% from same week in 2003, reports the Assn. of American Railroads. The week was the 7th busiest intermodal week ever. Trailer traffic was up 13.7% while container volume showed a 6% gain.

***Booze Smugglers Delight .... as huge differences in alcohol taxes across the EU are distorting the market & aiding smugglers, the European Union warned last week. But while concluding that "more convergence" is needed, the European Commission did not make any proposals because of "widely differing views" that pit the interests of wine & beer producers against those aiming to raise public revenue. The 25 EU members currently need apply only minimum levels of excise duties that were set in 1993. That allows countries like Greece, Italy & Spain to let wine go without added tax, while Britain slaps each bottle with US$2.12 in tax & Ireland US$2.29. But France adds only 2 cents & Belgium 40 cents, pulling hordes of Britons every week across the English channel to load up their trunks with case after cheap case. The same differentials apply to beer & other spirits. In Sweden, a bottle of Absolut vodka has US$18.49 tax added, while in Cyprus it's only US$2.02. The commission said "most member states" agree that closer harmonization of tax rates would "go a long way" toward ending market distortions that "facilitate fraud & smuggling." Read the report.

***Pacific CMA, Inc. Buys AGI ...... as the global freight forwarding/logistics services company has agreed, subject to completion of satisfactory due diligence, to acquire AGI Freight Singapore Pte Ltd, a Singapore based, freight forwarding/ logistic services provider.

***Stonepath Group Looks South .... as the global logistics services organization, took another step in creation of its global network with the acquisition of a controlling interest in 2 logistics businesses in Brazil -- Azteca Int'l Logistics & Cargo Connection Logistics -- both integrated freight forwarders with operations throughout Brazil. Stonepath

***When California Storage Is Not Storage ..... as the Int'l Warehouse Logistics Assn. (IWLA), a trade organization for 3rd party logistics providers in North America, supports a proposed simplification of California's business tax law that would make public warehouses more competitive with those in other states. IWLA members control more than 20 million square feet of storage space in California. California's proposed Business Activity Tax Simplification Act (AB 2061) includes an amendment saying the storage of a product in a public or 3rd-party warehouse does not, by itself, establish physical presence for the purpose of imposing taxes on a warehouse customer. "This will remove the financial penalty 3PL customers currently pay for temporarily storing goods in California warehouses," said PRISM Team Services. an IWLA member at Danville, CA.

***Oceanwide Inc. Buys ..... as it has acquired Micro Software Services Inc., commonly known as Editrade. The acquisition makes Oceanwide the largest private North American based provider of logistics software solutions to freight intermediaries. Read .& Oceawide

***Red Star Setting ........ as on May 21 U.S. trucking giant USF Corp. shut down a regional unit with 2,000 employees after back-office workers in Philadelphia demanded union representation, prompting a strike that was honored by 1,500 workers. Teamsters represent 1,500 Red Star drivers & dockworkers. USF executives said the Teamsters picketed a pier in Philadelphia & instructed other Red Star employees to strike, which they did. The strike continued, & late May 22, executives decided to close down all Red Star operations. Executives said they considered other options, but since 20% of Red Star customers had decided to take their business elsewhere, shutting down the company was the only economically viable option. Chicago-based USF is one of the country's largest LTL carriers. The Red Star unit mainly operated in the Northeast. Executives said Red Star managers quickly invited union leaders to talk, but the union demanded that managers sign a contract for the office workers right away. Red Star managers refused to sign a contract & wanted instead to hold a vote this week among the office staff on whether they wanted to become unionized, the executives said. In 2003, Red Star's revenue dropped 20% to US$52.6M.

***Endangered Potato Cargo ...... as popular diet plans that advocate minimal consumption of carbohydrates have put a dent in the business of a major refrigerated truckload carrier. Marten Transport Ltd., told potential investors that while most customers were showing increased demand for services, a major exception was producers of frozen french fries. Marten attributed the problem to the Atkins & South Beach diets, which advocate eating lots of protein & very few carbohydrates. Furthermore, the decision by the McDonald's fast-food chain to emphasize regular portions over "supersize" meals had also cut demand for the potato sticks.

***Bare Cargo ....... as more than 80 British students threw caution & their clothes to the wind May 24 to set a world cargo record for the number of nudes riding on a rollercoaster. The naked joy riders spent a hair-raising 1 minute & 50 seconds swooping around the rails of the gravity defying rollercoaster ride at a theme park south of London. A park spokeswoman said 81 students from 15 universities took part in record breaking stunt, which had never been attempted before.

***Mariusz Chomicz Egged On .... as the president of a Polish company, was sentenced by a U.S. court on May 21 to 30 months in prison for involvement in a caviar smuggling ring. Chomicz, 29, paid couriers to smuggle suitcases filed with caviar on flights to Miami -- then sold to a Miami-based caviar company through the use of a forged U.S. Fish & Wildlife import license & false invoices using the name BMT Trading. "No such company ever existed & smugglers sales price was well below market value," court papers said. U.S. Justice Dept. officials said 1,539 kilos of caviar were smuggled through this network. Chomicz directly responsible for 619 kilos of smuggled caviar worth about US$1.8M. On April 1, 1998, protection for sturgeon was greatly enhanced by its listing on the Convention on Int'l Trade in Endangered Species (CITES), of which the U.S. is a signatory.

***Farewell ..... as our respected colleague Michael W. Lodwick, Esq., a Proctor In Admiralty & senior member of our Los Angeles Maritime Bar passed away after a long, yet not generally known illness on May 21. Michael's health is reported to have taken an unexpected turn on May 20. His very distinguished Int'l practice continued with hard fought contests & settlements, even throughout this month with the focus & charge of a dynamo. Michael was a rare academic, turned litigator who represented the very best of our profession in ethics, intellect & tenacity. With many industry changing court decisions to his lasting credit, Michael will be missed, but not replaced. Services were held May 27 at Irvine Presbyterian Church, Irvine CA -- followed by a reception at Michael's home -- a celebration of Michael's life & Dixieland music to honor his pasion. In Lieu of Flowers, donations should be made to the Pacific Chorale, a non profit.


  2. The Cargo Letter Financial Page ______ 

**Air France. DOWN with a net profit of US$111M (EUR93M) for fiscal 2003-04, down 22.5% compared to last fiscal year's net profit of EUR120M.

**Burlington Northern Santa Fe Corp. UP as 1st-quarter earnings rose 3.2% on an 11.7% jump in revenue.

**Deutsche Post World Net. DOWN as net income fell 12% to EURO441M (US$522M) in Q1 from EURO500M in 2003.

**Eagle Global Logistics (EGL). UP as net income increased 114% in Q1 to US$6.0M.

**Japan Airlines. DOWN with a record net loss of US$787M for the year ended March 31

**Korean Air. UP with a net profit of KRW173.4 billion (US$1.46Bn) during Q1 2004, an improvement over last year's Q1 when it reported a net loss of KRW375.1 billion.

**Pacer Int'l Inc. UP as 1st-quarter net income increased to US$9.4M or 25 cents per share from last year's totals of US$7.4M or 20 cents per share.

**Pacific CMA, Inc. DOWN as despite record revenues, there was a net loss of US$122,793, down 13.7% from the net loss recorded during Q1 in 2003.

**Panalpina. DOWN as FY2003 net income was CHF108.1 million, a slight decrease over last year's result of CHF112.7 million. Both airfreight (620,000 tons) seafreight operations (680,000 TEU) saw growth in 2003.

**Trailer Bridge. UP with modest profit of US$359,158 in 1st quarter, compared to a net loss of US$2.5M in the corresponding quarter of 2003 -- following 3 years of losses.

**Stonepath. DOWN with net loss for 1st quarter of US$785,000 or 2 cents per share.

**UAL Corp., (United Airlines' parent) DOWN with a net loss of US$137M in April, including US$28M in reorganization expenses, which included non-cash items resulting from rejection of aircraft as UAL aligns its fleet with the market. UAL also recorded a loss from operations of US$75M, which represents an improvement of approximately US$221M over April 2003, according to figures filed by UAL with the U.S. Bankruptcy Court. Unit costs were down 12% compared with the 4th month last year & excluding fuel, costs were down 17%.

**Union Pacific (owns largest U.S. railroad) DOWN with net income of US$165M, or 63 cents per share, on revenue of US$2.89Bn for the quarter ended March 31. Net income in 2003's 1st quarter came to US$429M, or US$1.67 per share, on US$2.73Bn in revenue. A train crew shortage & charge of US$35.8M to pay for a court judgment are blamed for the loss -- while demand for UP services continued to grow.

**UAL Corp. (United Airlines' parent co.), DOWN with a 1st quarter net loss of US$459M -- operating loss of US $211M, up from a US$602M loss in Q1 2003.

***Low Horizon .... as Standard & Poor's Ratings Services has placed its ratings on Horizon Lines LLC "on CreditWatch with negative implications.". Horizon Lines is a U.S.-flag ocean shipping & logistics technology company based in Charlotte, N.C.

***APL Pushes Up .... as it carried 20% more containers in the 4 week period ended April 30 than in same period a year earlier, while its average revenue per 40-foot equivalent unit rose 8% year-on-year. Average revenue per FEU in the 4 week period ended April 30 was US$2,583, up from US$2,395 a year earlier. The April average of US$2,583, calculated on shipments in multiple trade routes covered by APL, compares to average freight rates per FEU of US$2,528 in March & US$2,529 in Feb. Neptune Orient Lines, parent of APL, reported overall Logistics revenue registered a 22% year-on-year increase in the 4 week period ended April 30 to US$86.6M, boosted largely by a 34% growth in revenue from Int'l services.

***Swifty Repurchasing ....... as Swift Transportation Co. Inc. has repurchased 5.544 million shares of its common stock at a cost of US$99.1M during 2004 as authorized under the US$100M stock repurchase program previously announced on Feb. 11, 2004. In addition, Chairman & CEO Jerry Moyes purchased 353,000 shares of the company's common stock during this same period. At its May 20, 2004 meeting, the board of directors authorized a repurchase up to US$40M of common stock beyond the US$100M previously approved. These purchases will be on the open market or in privately negotiated transactions at any time until May 31, 2005.

***Hugely Repurchasing .....as UPS Inc. raised its plan for buying back shares to US$1Bn, and said it would use the stock for awards to managers. The company had about US$500M left under a US$1Bn stock-repurchase program approved in Aug. 2003.



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

3. Freight Forwarder World Air Briefs __________ 

***IATA Looks To Oil ..... as high oil prices threaten the recovery of the global airline industry, which is emerging from the crisis caused by last year's SARS epidemic & the Iraq war, the head of the Int'l Air Transport Assn. said last week. With oil prices near US$40 a barrel, "the problem is now on the cost side," said Giovanni Bisignani. "On average, fuel accounts for 16% of airline operating costs. Fuel prices are 55% higher than one year ago. This could add between US$8Bn & US$12Bn to our annual fuel bill & threatens to strangle our modest projected return to profitability. Instead of flying high, we could be left swimming in red ink." IATA - which comprises 275 Int'l air companies - said passenger traffic in the 1st 4 months of 2004 rose 15.4% on the same period in 2003. Freight traffic was up 11.3%. Although those growth rates look high, in reality they are more modest because the year-earlier figures were low as the start of the war in Iraq & the SARS epidemic frightened off many travelers, compounding problems caused by a sluggish global economy.

***U.S. & Gabon In Open Skies .... as they have signed a free trade agreement for air transport between the nations. The open-skies agreement reduces government controls on many commercial decisions such as routes, capacity, frequencies, & pricing and creates opportunities for alliances. It also includes so-called 7th freedom rights for all-cargo operators, allowing airlines access from 3rd countries without having to return to their home country first.

***Guess Who's Coming To Dinner? .... as the European Union has approved an anti-terrorism deal with Washington for sharing passenger data (names, credit cards, etc.) on flights to the U.S., rejecting warnings about potential violations of privacy rights. EU foreign ministers approved the deal hours after it was adopted by the European Commission, Europe's executive body, which brushed aside objections from the European Parliament. The EU head office & U.S. officials say data collected under the deal would only be used to fight terrorism & other serious "transnational" crimes. You know who you are.

***The Cost of Freedom .... as several air cargo carriers that serve Hong Kong will add a security surcharge of Hong Kong US$1/kilo effective June 1 for export shipments. In addition, 72 airlines which use Hong Kong Int'l Airport increased their fuel surcharges on cargo flights by a 33% to cope with a rise in world crude oil prices in May. Charges on long-haul routes increased from HK$1.20 (US$0.15) a kilo of freight to HK$1.60.

***The Cost of Oil .... as American Airlines is raising its fuel surcharge on cargo shipments to 10 cents per pound for shipments within the U.S. & 25 cents per kilo on shipments for foreign delivery -- 3rd increase in cargo rates since Dec. Meanwhile, Lufthansa Cargo is raising its fuel surcharge from 24 cents to 30 cents per kilo, effective June 7, as is MARTINAIR Cargo, the Dutch freighter.

***Alitalia Good-bye? ..... as Italy's national airline, moved a step closer to going out of business earlier this month when the country's industry minister said the airline would be forced into liquidation if unions did not agree to a management plan to eliminate 3,300 jobs, or 15% of its work force.

***Hail Boeing Winglets! .... as fuel costs are an airline's 2nd highest expense -- after labor -- and prices for jet fuel are the highest they've been in 3 decades. But, there is good news out there. With Aviation Partners Boeing Blended Winglet Technology operators are shaving up to 5% off their fuel bills -- the equivalent of getting one free tank of fuel for every 20 fill-ups. By the end of 2004, over 620 Boeing Next Generation 737 700s & 800s will be performance enhanced with the Blended Winglet Systems. Considering a typical 737 utilization of 3600 hours per year, & a weighted average fuel savings of 3.6% over the full spectrum of operations, Blended Winglet Equipped NG 737s will save 110,000 gallons of jet fuel per aircraft per year. With 620 NG 737 flying with Blended Winglet Systems by year end, fleet wide savings will be over 68 million gallons -- close to half a billion pounds of fuel saved each year. Blended Winglet Equipped Boeing 757s & 767s will save even more fuel -- between 200,000 and 300,000 gallons per year per aircraft on average. If all Boeing aircraft on the planet were retrofitted with Blended Winglet Systems worldwide fuel savings would be close to 1.8 billion gallons each year. Quite wow!

***New 747 ? .... as even as Boeing Co. touts its sleek new 7E7 as the future of flying, the plane maker is again considering whether to revamp its fabled workhorse, the 747 jumbo jet. In the past decade, Boeing has floated many such plans for updating the 34-year-old 747, as it seeks to counter archrival Airbus' superjumbo A380. Meanwhile, Airbus has snagged 129 firm orders for the huge A380, a double-decker plane to debut in 2006 that will carry about 550 passengers. This time, Boeing is gauging interest in the 747A - for "Advanced" - that would be 20 feet longer & more technically advanced than the current 747-400ER. The plane would blend technology from the 7E7 with the 747's size in a package Boeing claims would be far cheaper to fly than the A380. If approved, it wouldn't be in service until at least 2009. The 747A would hold more cargo & 30 more passengers than the extended-range 747-400ER, seating 450 people instead of 416. In addition to new engines & an updated flight deck, Boeing is considering a complete interior redesign, reviving plans to create sleeping areas & conference rooms in unused space at the top of the aircraft. There's about a 50% chance the 747A will get built, but this time the stakes are higher. If Boeing again chooses to scrap the design it could be the beginning of the end for the 747.

***Green Card For Astar .... as FedEx Corp. & UPS Inc. have lost an appeal of their case that a Miami-based air cargo company is controlled illegally by foreign owners, the U.S. Transportation Dept. said May 13. An administrative judge found that Astar Air Cargo Inc. (formerly DHL Airways) is owned by U.S. citizens. It is illegal for non-U.S. citizens to own more than 25% of airlines operating within the U.S. FedEx & UPS had contended that Astar was controlled by German postal monopoly Deutsche Post. Deutsche Post, which owns the Int'l DHL network of delivery companies, is trying to gain a foothold in the U.S. express air freight business at a time when UPS & FedEx are going head to head - both on the ground & in the air.

***California's Agricultural Hub Rolls Out Welcome Mat ........ as Yosemite Int'l Airport (FYI), near Fresno in the Central Valley of California, will complete 6 new cargo improvements this summer -- including a 10,000-foot runway; certification for all-weather operations; modern U.S. Customs facility; "green" cargo ramps; a "no-slot" system for expedited aircraft loading & unloading; & capability of handling B-747-R400 aircraft. Evergreen Int'l Airlines - a dedicated cargo carrier based in McMinnville, Oregon - will be the 1st to utilize the expanded facilities. FYI is also located near a California Empowerment Zone & a California Enterprise Zone, both of which offer incentives including tax credits for hiring, sales or use tax, business expense deductions, tax exempt bond financing, & bonus points for federal contracts. Airport expansion will establish FYI as strategic logistics hub for central California. Geez let's go.

***Korean Air's Air Forest ..... as it has sent more than 100 of its staff to Mongolia to work in a program designed to prevent further damage to the country's environment. The workers planted 3,000 young trees in the capital, Ulan Bator, & the surrounding regions of Baganuur to help create a forest in the vast desert areas of the country. The 12-day operation "Korean Air Forest" began on May 20 to prevent decertification and the "Yellow Dust Phenomenon" which not only affects Mongolia but other neighboring countries in Asia as well. Korean Air, which donated a B-727 aircraft to Mongolia in 1992, is planning additional overseas community service programs in the future. Korean Air, with a fleet of 116 aircraft, is one of the world's largest 20 airlines & operates almost 400 flights per day to 88 cities in 32 countries.

***When It Has To Be Right ..... as Drangonair aircraft had one of its cabins specially configured in order to transport 21 national treasures from Xian to Hong Kong on May 26. The flight was chartered by the Hong Kong Buddhist Assn., with the items being flown in to mark Buddha's birthday on May 26. Among the artifacts is a revered finger bone of Sakyamuni, the founder of Buddhism. Other treasures include a small pagoda made of solid gold, a casket for the Buddha's body made of gold and silver, a seated Bodhisattva figure, & a silver lotus. All the items come from the Famen Buddhist Monastery in Xian, and will be put on public display at the Hong Kong Convention & Exhibition Center from May 27-June 4. "We made special arrangements to ensure they were treated respectfully on their journey," said Dragon Air. "This includes the removal of some seats in the cabin to accommodate the reliquary of the finger bone."

***Air Kuhne + Nagel ... as Lufthansa Cargo has named a B-747-200F freighter "Klaus-Michael Kuhne" after Kuhne + Nagel's president. The naming ceremony took place on May 17, at Frankfurt Airport. Kuhne + Nagel has been partners with Lufthansa Cargo since 1998 and was one of its biggest customers last year. Warning: Klaus-Michael does not know how to fly! >> In other news, Lufthansa Cargo flew a young rhinoceros cow, born at Frankfurt Zoo 3 years ago, to South Africa on May 19.

***Flight of The Arrow ....... as a committee of creditors for Arrow Air, Inc. has agreed to a plan of reorganization that will bring the all-cargo airline out of bankruptcy, & protect hundreds of jobs in South Florida's aviation, cargo & Int'l trade industries. A disclosure hearing was held on May 19, in which Arrow, its new secured lender, Arrow Air II, and other non-secured lenders agreed to a plan said to ensure strong future operations. On June 10, 2004, Chief U.S. Bankruptcy Judge Emeritus A. Jay Cristol is expected to confirm the plan of reorganization, after which Arrow will no longer be operating under Chapter 11 bankruptcy protection & will become a new, reorganized company.

***Terror Simulator ..... as IES Interactive Training, has delivered 12 Range 3000 XP4 digital training simulators purchased by the U.S. Transportation Security Admin. (TSA). The TSA is using IES simulators for its Federal Flight Deck Officer (FFDO) training program, based at the Federal Law Enforcement Training Center (FLETC) in Artesia, NM. The Range 3000 XP4 is a use-of-force digital training simulator that allows FFDO trainees to encounter realistic, real-world scenarios in a safe environment. The simulators, which gauge & analyze both judgment & accuracy, are equipped with FFDO-specific video scenarios. In addition, TSA trainers will be able to create & edit their own scenarios in as little as a few hours, ensuring that pilots going through the FFDO training program receive the latest scenario training. The Range 3000 XP4 is used by other federal agencies, including the U.S. Border Patrol, Coast Guard, FBI, NASA/Security, & Secret Service.

***London's Metropolitan Police Foil .... as an attempt May 17 to steal gold bullion worth US$70M & cash from a warehouse at Heathrow Airport was crushed. A gang smashed through shutters of the Swissport Cargo warehouse in a van & threatened the workers with knives, cudgels & firearms. But more than 100 officers who were lying in wait arrested 6 men after disabling the van. Police did not elaborate on how they knew the robbery attempt was going to take place.

***Taking A Bite Out of Freight ...... as DHL Express Philippines has introduced a "Vampire Courier" service for companies in the Philippine Export Zone Authority areas that require pick-up & delivery of shipments after 5pm, & before 8am. What were they thinking?

***My Buddy Saddam .... as an American Airlines flight attendant who told authorities she found a note saying there was a bomb in a jet's cargo hold was charged May 28 for writing the threatening letter, which caused the plane to be diverted. Gay Wilson, 37, of Arlington, Texas, was charged with unlawful interference with an airline, a federal charge with up to a 20-year prison sentence. The jet flying May 27 from Dallas/Ft. Worth to Boston was diverted to Nashville after Wilson said she found the note in one of the plane's lavatories. The note read, "There is a bomb onboard this flt to Boston in cargo. Live Saddaam!'' according to Nashville television station WSMV. Wilson arrested in Dallas & scheduled for court hearing June 1. The 129 passengers got off the plane & were re-screened by the TSA & FBI -- then given rooms in local hotels. Flight left Nashville for Boston around 7 a.m. May 28, with 120 passengers on board. This could go in Ms. Wilson's permanent record.



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

  4. FF World Ocean Briefs ___________________ 

***Customs & Border Protection Reverses Position ...... as it has agreed to accept the traditional definition of "shipper" on bills of lading, & will launch a voluntary program to acquire more detailed information about foreign manufacturers & suppliers. Traditionally the "shipper" is the party that tenders cargo to a carrier, and that will be the definition that Customs has agreed to continue to use -- not the party which tenders cargo to an NVOCC. When Customs published final rules for new advance electronic reporting of cargo data last Dec., it defined "shipper" as the foreign vendor that originates the cargo. That definition would not allow forwarders, non-vessel-operating common carriers, consolidators or other 3rd parties to identify themselves as shipper on the bill of lading. Industry groups petitioned Customs to reconsider the rule. Customs agreed in principle, although it has not put the change in writing.

***Maritime Security Standard -- Not Realized ..... as it now is virtually certain that most ships & ports will fail to comply with the Int'l Ship & Port Facility Security code of the Int'l Maritime Organization by July 1. A May 17 survey of 35 governments by the IMO showed that only 1,902 of their 20,722 ships have received their ISPS ship security certificates, representing a percentage of just 9.2%, with only 6 weeks left for all the other vessels to comply. The IMO says that figures are changing every day. The 9.2% compliance percentage showed an increase from the 2.6% ratio reached on March 12. The Int'l Assn. of Classification Societies reported a higher proportion of compliance among its members. It said 20.4% of its 11,568 ships have received a security certificate, up from 3.7% in March. The U.N.'s IMO said it would begin enforcing the Int'l Ship & Port Security code when it takes effect July 1, which could disrupt shipping -- the deadline won't be extended. IMO adds that only 301 of about 5,500 port facilities comply with the security code. What now?

***You Must Speak Up! ...... as the U.S. Coast Guard has issued a Bulletin reminding the maritime community that, effective July 1, 2004, vessels & facilities coming under the maritime security regulations will be required to report to the U.S. Coast Guard suspicious activity occurring on or adjacent to U.S. waters. Suspicious activity includes a wide variety of occurrences, such as unknown persons taking photos of vessels or waterfront facilities; vessels loitering around bridges or facilities; & suspicious attachments to bridges. 

***Attacks Fewer -- More Violent ........ as piracy watch center of the Int'l Maritime Bureau recorded 79 pirate attacks worldwide from Jan. to March, compared to 103 last year. While the number was down, the level of violence had increased, the Kuala Lumpur-based center said. Southeast Asian waters remained the most dangerous. The highest number of attacks, 21, occurred in Indonesian waters. Another 8 occurred in the Malacca Straits, & 6 in the Singapore Straits. More than 25% of the world's trade & 50% its oil are shipped through these waters, which Asian governments fear are a likely target for terrorist attacks.

***A Bigger & Better Panama Canal? ....... as the plan will be unveiled this summer. The project will likely involve building separate, larger locks; building a new dam; & creating an artificial lake that would swallow a large swath of farmland. The Gaillard Cut section would also be widened, and all the excavated dirt would likely be used to built a new port. The lock construction alone could take a decade -- entire plan might not be completed until 2025. The move could be crucial, as industry analysts predict that the Canal will become obsolete &emdash; at least for large ships &emdash; in 10 years.

***China's Shipping Boom ..... as it's insatiable appetite for raw materials, like coal, iron ore, grains & metals, helped balloon imports there 40%, to US$413Bn. Iron ore imports rose 32% to 148 million tons while soybeans doubled to 24 million tons. So companies that rent ships that carry bulk cargo have jacked up rates. They've tripled in the past year & quadrupled since 2002. In Feb. the Baltic Dry Index hit an all time high. "What we have is a bubble in dry bulk," says Sydney P. Levine, a maritime economist who runs New York-based Shipping Intelligence. The bubble has triggered rampant speculation in the so-called relet market, where a shipping company recharters ships. On May 1, 2003 Korea Line signed a 2 year charter for the M/V Marvellous, a 169,000-ton bulk carrier, at US$19,250 a day. A day later Korea Line relet the Marvellous to Oak Steamship, which agreed to pay US$21,500 a day for 2 years. The next week Oak relet the ship for US$27,500. By the time Oak got the ship back at the end of the year, it had already lined up Sinochart to relet it for 16 months at US$55,800 a day. By reletting the Marvellous at the right times, Oak stands to make US$18M over 2 years. Though most of the boom is in bulk carriers, rates for container ships are also up, as much as 30%.

***MOL Goes Retail ....... as its subsidiary MOL (China) Co. Ltd. has opened a Representative Office in Shenyang as part of its 3 year plan introduced last year to boost services in China. Shenyang, the capital of Liaoning Province, is a key center for the Chinese government's Northeast Development Project as well as China's automotive industry. Last year, MOL opened 5 Representative Offices, and MOL (China) opened 4 branch offices, bringing the total number of MOL Group network offices on the mainland to 19.

***Hapag-Lloyd Group Goes To Sea ...... as it will return to its roots in shipping & sell off its holdings in non-shipping interests. The move will enable Germany's Hapag-Lloyd to become a focussed shipping company - comprising Hapag-Lloyd Container Line & Hapag-Lloyd Cruises. The development comes at a time when the group recorded its best performance in its 156-year history. Operating profit more than doubled from EUR104 million in 2002 to EUR248 million in 2003.

***Trans-Atlantic Conference Agreement Up ...... as the carriers introduce another round of freight rate increases July 1. Westbound, the conference plans to raise tariff rates US$280 per 20-foot container & US$350 per 40- or 45-foot box. For eastbound cargo, the planned price increase is US$240 per 20-foot container & US$300 per 40- or 45-foot box.

***Far East/India/UAE-West Africa Forum Up ...... as it will increase rates by US$400 per TEU from July 1. The 8 member lines in the forum are: China Shipping, CMA CGM, Delmas, Gold Star, Maersk-Sealand, MOL, PIL and P&O Nedlloyd.

***Mediterranean Canadian Freight Conference Up .... as it will increase westbound freight rates by US$200 per TEU & US$250 per 40-foot box, effective June 15. Mediterranean Canadian Freight Conference carriers are Canada Maritime, Cast, Senator Lines & Zim.

***Smarter Boxes ..... as Science Applications Int'l Corp. (SAIC) has announced the arrival of the first 12 Operation Safe Commerce (OSC) intermodal shipping containers at a distribution center south of Seattle, WA. Operation Safe Commerce is a public/private relationship being implemented by the Transportation Security Administration. The 12 containers traveled through the supply chain by truck from a remote location in Central America to a Pacific coast port, arriving at Port of Seattle & finally by truck to the distribution center. Additional containers will be sent & evaluated over the next few months. Each container will be subjected to a modified loading process, container sealing, tracking & information gathering technologies, monitoring technology & unplanned event alerts. The technologies used include Web enabled video, electronic container sealing, container environment monitoring, radio frequency identification (RFID) devices, electronic tracking, GPS satellite tracking, data consolidation and event identification & alert software featuring centralized data with controlled access. "A major challenge for shipping any container is to reduce the risk of unintended cargo insertion as the container is loaded & transported in the source country," said SAIC.

***FCC Can Rule Says FMC Can ...... as the Federal Communications Commission issued a rule increasing maximum field strength & transmission duration for 433 MHz radio frequency identification (RFID) systems used to identify contents of commercial shipping containers, as requested by the FMC. Improved RFID systems could benefit commercial shippers & have significant homeland security benefits by enabling the contents of containers to be easily & immediately identified and by allowing a determination of whether tampering of the contents has occurred during shipping. The rule effective June 23 & may be viewed at: Rule

***Can Blight .... as the public agency that built the Alameda Corridor has joined the Ports of Long Beach & Los Angeles in searching for ways to reduce the impact that the storage of empty cargo containers has on the quality of life in the harbor area. Alameda Corridor Transportation Authority will assist the Ports in identifying existing facilities that store empty cargo containers & provide opportunities to consolidate them in less sensitive locations. The cargo-container initiative has been added to ACTA's "Expanded Mission," a plan with US$3.26M in funding. Opened in April 2002, the Alameda Corridor consolidated train traffic from 4 branch rail lines into a high-speed freight rail expressway stretching 20 miles between the Ports of Long Beach & Los Angeles & the transcontinental rail yards near downtown Los Angeles.

***Bulldog Technologies Bites ... as its new Yard BOSS remote monitoring sensor, the RB-210 connects across locking rods of the shipping container/cargo trailer & provides real time security status on integrity of the container/trailer door seal, as well as motion sensitivity & impact or tamper monitoring. So just steal the container!

***Bigger $$ Targets .... as the UK Dept. for Transport reminds that effective May 13, the 1996 Protocol to the 1976 Convention on Limitation of Liability came into effect. Limits for small ships (300-500 gross tons) increased six-fold, while limits for other ships increased 250% on average. The increases are intended to account for inflation and for the fact that small ships can cause a disproportionate level of damages.

***Top Port .... as more than 13,000 readers of cargo trade magazine CargoNews were polled to select the Top Seaport in North America, and the Port of Los Angeles was named the winner. Announced at the Shipper's Choice Awards on May 12, the Port of Los Angeles was selected over finalists Port of Long Beach & Port of New York/New Jersey for the top honor. This year's awards presented in Shanghai. CargoNews is published from Hong Kong & has been publishing for 28 years.

***Big Lift ... as PSA Singapore will invest US$70.2M on 12 new super post-Panamax 22 cranes for installation at new berths at Pasir Panjang Terminal (PPT). Each crane is twin-lift enabled & has an outreach of 67 meters. They also have a lifting capacity of 60 tons & lifting height of 38 meters. The Singapore port operator said the cranes are geared for container ships with a capacity in excess of 8,000 TEU.

***Venice Makes Waves ...... as the "Jewel of the Adriatic" is in jeopardy from man-made forces. The biggest culprit is the cumulative effect of wakes from more than half a century of motorized boat traffic that greatly accelerated erosion of and damage to Venice's canal walls, bridges & other treasures. Teams of Worcester Polytechnic Institute students, led by faculty advisor & native Venetian Fabio Carrera, have developed a plan currently being implemented that aims to reduce the quantity of wakes by dramatically decreasing cargo-boat traffic in the city's canals. The plan calls for cargo to Venice's shops, stores & businesses to be delivered based on its destination in the city rather than by product, the current method. One of the teams calculated that cargo journeys would be cut down by about 90% by making this change in delivery method. As to fears of job losses, WPI students found that delivering cargo by destination will require about the same number of workers as the current product-driven system -- same amount of cargo will still need to be delivered. There will be fewer boats plying the waters with the WPI destination-based plan, but this will be compensated by more work & new jobs on land. More workers will be needed "upstream" at the warehouse, where goods will be sorted & loaded onto boats for their various destinations. At each destination, cargo will then need to be unloaded at the dock & distributed to the island's stores & shops.

***The Right Stuff ..... as in an effort to protect North Atlantic right whales, one of the world's most endangered large whales, the Bush administration is considering speed & routing restrictions for East Coast shipping. The U.S. National Oceanic & Atmospheric Admin. plans to release details by month's end of the 1st step in the process of issuing the new rules. Only about 300 right whales exist in U.S. & Canadian waters of the western North Atlantic, the species depleted largely by centuries of commercial whaling. Now, accidental collisions with ships or entanglements with nets threaten recovery. Right whales, apparently named for a belief that they were the "right whale" to hunt, were much hunted for their oil. The Int'l Whaling Commission banned commercial whaling in 1986. NOAA says there have been at least 292 ship strikes on large whales from 1975 to 2002, including 38 involving North Atlantic right whales. Options for protecting the last right whales, NOAA officials say, include rerouting vessels around highest-risk areas, restricting ship speeds to not-yet-determined levels in those areas or changing their routes to minimize the time spent in whale areas. Estimated the new rules could cost the billion-dollar shipping industry US$10M to US$20M a year.

***Wind In Their Sails ... as the Texas General Land Office (GLO) has accused the New Mexico Land Commissioner of stealing wind rightly belonging to Texas. While not directly a maritime matter, this could prove a portent of things to come as more wind farms are built offshore. It seems that New Mexico plans to build a wind farm at the same time Texas is considering its own project. The Commissioner of the Texas General Land Office issued a bounty for his New Mexico counterpart, referring to him as "a thieving', no-account wind rustler".

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

1844 - USS Constitution sails from New York on 'round-the-world cruise.

1918 - USS Olympia anchors at Kola Inlet, Murmansk, Russia, to protect refugees during Russian Revolution.

1919 - Navy NC-4 completes Trans-Atlantic flight from Newfoundland to Lisbon, Portugal.

1952 - Tests from 26-29 May demonstrate feasibility of angled-deck concept on simulated angled deck on USS Midway.

1973 - Launch of Skylab 2 mission, which was 1st U.S. manned orbiting space station. It had an all Navy crew of Capt. Charles Conrad Jr. (commanding), Cmdr. Joseph P. Kerwin, & Cmdr. Paul J. Weitz.

1980 - 55 women become 1st women graduates from the U.S. Naval Academy.

1990 - USS Beaufort rescues 24 Vietnamese refugees in South China Sea.

U.S. Navy History

***Throughput ........ >> Port of Los Angeles' total throughput in April rose 5%, to 616,897 TEUs, compared with a total traffic of 441,061 TEUs at Long Beach that was 10% higher than a year ago. >> Port of Savannah, Ga. handled 1.1 million container tons in April, 15% more than in April of last year & also saw the number of TEUs exported increase 25% in April -- total of 59,997 TEUs exported as compared to 48,141 TEUs last year. >> Port of Tacoma handled 17% more throughput than in 2002 -- totaling 1.73 million TEU in 2003. >> Port of Tianjin set new throughput record in April handling 331,100 TEU in April, an increase of 30.9%.           


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. Over 400 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 dramatic pictures at our special "Gallery of Cargo Loss" website feature. 

 See our new photo feature for May 2004: "Sea (to) Land Express"

Under our Cargo Law office Windows this month - photos -- "Nosing Up & Sitting Down"

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 and your amusement..............

12 Steps To Better Warehouse Safety

Active World Internet Users - March 2004

Bill of Lading Clauses .......on the subject of surrender of a negotiable bill of lading & views of Officers of the ICC Banking Commission.

Bow Wave ...... the e-zine for news & views on trade, insurance & risk.

Counterterrorism At Airports

Independence Seaport Museum

Int'l Assn. of Masters, Mates & Pilots

Is RFID For Real?

MARAD Lets It's Children Go .... as the U.S. Maritime Admin. has approved applications for the transfer of 6 U.S. ships to foreign registry.

New Zealand Border Security Bill

Next Generation of The U.S. Aircraft Carrier

Order Picking for the 21st Century: Voice vs. Scanning Technology ... download the white paper.

Sea Services Arrive in New York for Fleet Week

The Final Frontier -- Launch of Space Ship 1 .... US$98K per seat -- 1st private human flight!

The Quest ......THE free e-zine for Int'l transportation & insurance.

U.N. Atlas of The Oceans

U.S. Consumer Product Safety Commission Product Recalls

U.S. Dept. of Homeland Security: National Response Plan (NRP) ... and progress made.


Freight Bill Payment Module .....for Freight-Logic's Web-based transportation management system -- designed to automate & streamline the in-house freight payment process.

Int'l Arbitration: A Handbook .... 3rd Edition, Editor: Professor Phillip Capper

Maritime Security Compliance Video Training Series for ISPS & MTSA Certification.


Transport Events

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.

China World Shipping (CHI Shipping NA) .... 15-16 July 2004, China World Hotel, Beijing. Hosted by Cosco Group, Drewry Shipping Consultants & Maritime China.

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

Int'l Truck Show ..... Las Vegas Nevada on June 10, 11 and 12, 2004.

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 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.

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

Wireless Warehouse Europe Conf. & Exhibition ....Oct. 14-15, Brussels

 FOR FUN>>>>>>>>>

Art of Anatomy

Out-of-Fashion Plants

Project Seahorse

U.S. Oldest Active Warship Hits 43 -- USS Kitty Hawk.



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

  7. New Transport Related Legal Cases _______  

Dahiya Vs. Talmidge Int'l, Ltd.

5th U.S. Circuit Court of Appeals

May 18, 2004 No. 02-31068

Over a vigorous dissent, the U.S. Court of Appeals for the 5th Circuit ruled that it is without authority to review a district court's decision to remand a case to state court for lack of subject matter jurisdiction. A foreign seafarer was injured on a foreign vessel & was evacuated to a Louisiana hospital. After returning to India, he brought suit for his injuries in state court in Louisiana. Defendant ship owner removed the case to federal court, asserting that the dispute was subject to an arbitration agreement. The federal district court held the arbitration clause to be invalid and that it had no subject matter jurisdiction. On appeal, the court held that it had no authority to review the remand, no matter how erroneous it may have been. Case decision.

Aasma v. West of England Shipowners Mutual Insurance Assoc.

6th U.S. Circuit Court of Appeals

May 19, 2004 No. 03-3223

In an unpublished opinion, the U.S. Court of Appeals for the 6th Circuit affirmed a district court's confirmation of a British arbitration award in favor of a protection & indemnity (P&I) club against plaintiff seamen. Acting on behalf of the seamen, a law firm sued States Steamship Co. for alleged asbestos-related injuries. When States, which was in bankruptcy, did not answer, plaintiffs obtained a default judgment. Suit then brought against 2 P&I Clubs that had insured States. One club prevailed on the "pay to be paid" provision in its policy. The suit against the 2nd club was referred to arbitration in Britain in accordance with terms in the policy. The British arbitration was in favor of the club & included an award of legal costs & fees against plaintiffs. When defendant Club sought to recover the award in U.S. court, plaintiffs contended that the award violated basic notions of morality & justice. The court found no useful purpose in issuing a detailed opinion affirming the district court order upholding the original award.

East West Corp. v. DKBS 1912 AKTS SVENBORG

Chilean Law as determined by UK Court - carrier liable for delivery of goods from authorized Customs warehouse without surrender of bill of lading. Case 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


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