Law Offices of Countryman & McDaniel


Air & Ocean Logistics - Customs Broker News

30 June 2006


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." Here is everything from our industry in June 2006 -- plus a a prime time T.V. special featuring our Michael McDaniel of The Cargo Letter!  Otherwise, we learn this month of U.S. West Coast alternative ports on the rise.

We are often asked whether Countryman & McDaniel, conducts training seminars. Yes, from multiple Fortune 100 companies, to smaller forwarders, to the U.S. government, to insurance companies -- for years we have conducted inovative programs for domestic & Int'l claims, Customs, security, trade compliance & post 9/11 industry business practice. McD

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/trade consultant attorneys at LAX.

INDEX to The Cargo Letter:

OUR Top Story***

  Return of The Pirates! ...... on The History Channel

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 Top Story***

Return of The Pirates! ....... as the biggest threat to the world you know almost nothing about will finally be revealed on July 16, 2006 In a two hour U.S. prime time special, The History Channel presents a live action thriller which will hold your attention -- and cause you to hold your breath! 

Modern day pirates -- a US$10Bn world problem -- are exposed in their rise from early attacks on refugees after the War in Vietnam to possible future mass casualty attacks upon American ports where inconceivable losses are no longer improbable. The pirates have become terrorists & the terrorists are now pirates. This exciting feature raises the question of why the hijacking of a merchant vessel on the high seas and the murder of her entire crew never makes the 6 o'clock news. Filmed throughout the world, major attacks are recreated, with insights from survivors -- to include passengers on the cruise ship M/V Seabourn Spirit attacked off Somalia in Nov. 2005.

We are proud that the principal guest for 'Return of The Pirates!" is maritime lawyer Michael S. McDaniel of the Countryman & McDaniel law firm and The Cargo Letter.  Please watch -- and then write to us with your feedback. We now have a window of interest for this threat to our industry.

Sunday, July 16 -- 8pm to 10pm - The History Channel -- don't miss it.



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

  1. Freight Forwarder Trade Briefs _____________ 


***TRANS CAMS Brings You New World Windows ......... as The Cargo Letter year long project to restore our world-wide network of live cameras is now complete! Thanks to our Libby Thompson, you now have live windows on over 1,157 airports, harbors, rail depots, border crossings, space ports, shipyards & warehouses throught the world.  Our website feature was out-of-date after 10 years, but this extensive refit project will now take you directly to air traffic control at world airports, or allow you to stand upon the command bridges of 59 vessels underway at sea.  Where will you go today?

***U.S. Transport Climbs As Percentage of Economy ........ as business logistics costs in the U.S. represented a record US$1.2 trillion&emdash;or 9.5% of the gross domestic product (GDP) in 2005, up from 8.8% in 2004, according to the Council of Supply Chain Management Professionals' 17th Annual State of Logistics Report, dubbed "Embracing Security as a Core Business Function."  Transportation costs were a major driver for this increase, as they went up 15.2% in the last year and now account for 6% of the United States' GDP.  All modes of transportation were able to raise rates in 2005. Overall, transportation costs accounted for US$744Bn of the US$1.2 trillion in logistics costs. Trucking costs increased by US$74Bn to US$583Bn. Rail transportation costs jumped 14.3% to US$48Bn. Air freight increased 17.6% or US$6Bn during 2005.

***EC Customs Needs Work? ....... as a World Trade Organization dispute settlement panel report has criticized the European Community for the lack of uniform administration of customs laws among its 25 country members. The report comes in a dispute brought by the United States in March 2005. In the dispute, the U.S. said the EC customs system lacked uniform procedures, particularly for reconciling differences in classification and valuation of imports, a violation of the EC's WTO obligations. The WTO panel found the EC's customs system to be "complicated, and at times, opaque and confusing." "If each of the 50 U.S. states administered U.S. customs law through a separate agency, with no central authority to ensure uniformity, there would be no end to the complaints by other WTO members," said Deputy U.S. Trade Representative Peter F. Allgeier.

***India: The Next Powerhouse ....... as by 2010, India's manufacturing sector could export goods valued at US$100Bn. This growth will fuel the creation of 25 million new jobs, according to a study by the Associated Chambers of Commerce and Industry of India.(ASSOCHAM). According to Hindu News online, ASSOCHAM's report states the US$100Bn mark is double the present US$50Bn value. 

****Kobe Beef Stand Back ....... as the Japanese government has agreed to once again lift its ban on U.S. beef imports.  Japan, like many countries, closed its borders to U.S. beef in Dec. 2003 after the U.S. Dept. of Agriculture confirmed a case of bovine spongiform encephalopathy, or "mad cow" disease, in a Washington State cow. Prior to the ban, the U.S. exported US$1.4Bn in beef to Japan in 2003, making it the U.S. beef industry's largest overseas market.

***Rwandan Agreement ...... as the U.S. has entered an agreement with Rwanda this week to strengthen trade & investment ties between the countries. The Trade & Investment Framework Agreement (TIFA) will provide a consultative forum through which the countries may address their bilateral trade issues and enhance mutual investment.   The World Bank's Doing Business 2006 report named Rwanda a top economic reformer in sub-Saharan Africa. U.S. exports to Rwanda totaled US$10.2M in 2005, a decline of 8% from 2004. The U.S. has TIFAs with several other sub-Saharan African countries, including Ghana, Mozambique, Nigeria, South Africa, COMESA and the West African Economic and Monetary Union.

***Jamaican Deal, Maan ...... as an agreement has been reached between the U.S. & Jamaica to install radiation detection equipment at Jamaican ports to screen cargo containers bound for the U.S. Both governments signed a Declaration of Principles that adheres to both the Container Security Initiative under U.S. Customs & Border Protection, as well as the Megaports Initiative under the National Nuclear Security Administration.

***Staggered Rails? ........ as a report from the Government Accounting Office said rail shipping rates have not increased over the past 20 years following the Staggers Rail Act of 1980, which essentially deregulated the U.S. rail freight network. The GAO's analysis stretches from 1985 to 2004, but indicated a subsequent rise in rates to 2006. "Although there has been a slight upturn in rates from 2001 through 2004, the industry continues to experience rates that are generally lower than they were in 1985," the GAO said. "According to freight railroad officials, shippers & financial analysts, since 2004 rates have continued to increase as the demand for freight rail service has increased, rail capacity has become more limited, and as a result, freight railroad companies have gained increased pricing power," said GAO The Staggers Act limited the authority of the Interstate Commerce Commission, which is now the Surface Transportation Board, to regulate rail rates only for traffic where competition is not effective to protect shippers. It also legalized railroad-shipper contracts. At least 55% of all U.S. rail traffic moves under contract today. Those contracts are privately negotiated agreements between railroads & shippers over rates, service levels, equipment used, and minimum annual volume of traffic.  Looking ahead, the GAO said the ability of railroads to meet the increased demand for freight traffic over the next 15 to 25 years is "largely uncertain."  The GAO's Full Report

***Australian Lessons Learned ......... as the Australian Customs Service has released the independently-produced Review of The Integrated Cargo System -- the electronic system for tracking  & clearing imported cargo started in Oct. 2005. Numerous transition problems resulted in significant cargo delays. The review revealed that the root causes of the problems were inadequate end-to-end testing; quality problems with 3rd-party software; a lack of staged implementation; and inadequate training in the new system. The lessons learned.

***French Lesson? ....... as FedEx Express & the French Office of Economic & Commercial Affairs (FOECA), have joined forces to expand trade and investment between France and the U.S. The resources of FedEx and FOECA will be made available to small- and medium-sized French & U.S. businesses that want to import & export. Through this alliance, U.S. & French businesses will have increased opportunities to find Int'l buyers and receive the training & assistance necessary to enter new markets.  The FedEx role will be to generate awareness among its customers about the benefits of the FOECA export assistance network present in six cities within the U.S.--Atlanta, Chicago, Houston, New York, San Francisco & Washington, D.C.  Could be a tough sell.

***Ground Parcel Traffic Boom To Continue ......... as the The Colography Group in its annual report says that ground parcel tonnage grew 5% last year while revenue climbed 8% year over year. With a strong spurt in the 4th quarter, 2005 finished with a total of 4.1 billion shipments with total tonnage of 42 billion pounds and overall revenues for the transportation sector of more than US$26Bn, both overall records. Looking at ground parcel results, Colography president, Ted Scherck, observes that, "last year continued the long, secular trend of gains in this sector. As we have said many times in the past, U.S. commerce has migrated to a short-haul, regional model where goods are delivered and distributed less than 600 miles via lower-cost surface transport. As we move well into 2006, we see nothing on the horizon to change this trend."

***RailAmerica Derails Executives .... as the holding company for 42 short-line and regional railroads in the U.S. & Canada, has cut 20 upper & middle management positions as part of a 5 year strategic plan designed to save US$10M to US$15M in operating expense & capital savings each year. The Boca Raton-based company said about half the redundancies came from its corporate head office with the other half from field locations.

***FedEx Buys Major U.S. Trucker ...... as it is to pay US$780M in cash for the privately held Watkins Motor Lines & certain affiliates. Watkins has 139 terminals in 42 states and provides service in Canada, Mexico, and to Puerto Rico, Alaska & Hawaii.

***NMFC Now Online ........ as the National Motor Freight Classification is used to classify all the commodities shipped and handled by motor freight carriers in North America. The NMFC facilitates comparisons of the transportability of commodities moving in intrastate, interstate and foreign commerce. Commodities are assigned one of 18 classes &emdash; from a low of 50 to a high of 500 &emdash; based on four transportation characteristics: density, stowability, handling and liability. ClassIT, the online version of the NMFC, includes search capabilities that allow the user to add their own terms linked to classification items or other terms, as well as an embedded list of common terms that are not found in the NMFC. Shippers may purchase a single-user license for ClassIT at US$199. Multi-user discounts are available.

***Schneider National Sells The Paymaster ...... as the largest U.S. truckload carrier, plans to sell its freight audit & payment service to U.S. Bank, which electronically processes more than 25 million freight documents worth more than US$5Bn each year through its PowerTrack payment system.  The Schneider Logistics subsidiary created its automated freight payment service by acquiring a payment service from Tranzact Systems Ltd. in 2000. Schneider Payment Services will be renamed U.S. Bank Freight Payment Services.

***Schneider National Also Dumps The Flatbed ..... as it will sell its Specialized Division to Maverick USA, the parent company of flatbed carrier Maverick Transportation. Maverick, Little Rock., Ark., will acquire 380 tractors, 870 trailers, more than 425 drivers, loading equipment and several facilities, including ones in Laurinburg, N.C., and Knoxville, Tenn. Maverick's new line of business will be called Maverick Specialized.

***DHL To German Homes ..... as it has opened a US$44.3M logistics center in Greven near Münster, Germany for the shopping channel HSE24 (Home Shopping Europe), moving up to 40,000 packages each day.

***Golden Gate Logistics Goes Global ....... as it has completed the acquisition of Global Link Logistics. Based in Atlanta, Georgia, Global Link is among the 10 largest ocean forwarders in the rapidly growing China to U.S. trade lane and is also the leading freight forwarder & customs broker for the U.S furniture industry.

***Weber Distribution Grabs Food Deal ..... as the West Coast logistics & supply chain management provider has acquired TaB Warehouse & Transportation Co., a West Coast food-confectionary distributor, in a move that will doubles Weber's size in terms of employees & revenue. Through the purchase of TaB, privately held Weber will add nearly 700,000 square feet of warehousing space to its West Coast distribution network, including facilities in Tolleson, Ariz.; Wilsonville, Ore.; and 2 in Fontana, Calif.

***FedEx Has Your Inventory ....... as it has rolled out a new logistics service dubbed FedEx Critical Inventory Logistics. The new service lets customers store inventory items at 18 FedEx Kinko's locations in the U.S. -- allowing them to ship a critical item within a tight timeframe in certain locations with little advance notice. The service will be geared toward customers in the healthcare, telecommunications, semiconductor, and biomedical industries, among others. FedEx did a soft launch of the service last fall, with items moving from its 500,000 sq. ft.  global distribution center in Memphis to the 18 FedEx Kinko's Locations, which each have 5,000 square feet of storage space.

***UPS Turns Brown To Green ....... as its fleet of alternative fuel trucks recently hit a major milestone, surpassing more than 100 million miles in delivering packages to homes & businesses. The total mileage accumulated just since 2000 now stands at 108 million miles, or the equivalent of circling the Earth more than 4,337 times or traveling from Earth to Venus four-and-a-half times.  The company's use of alternative fuel vehicles began back in the 1930's with electric vehicles in New York. However, UPS did not begin isolating mileage data for its "green fleet" until 2000.  UPS was the 1st company in the U.S. to deploy hydrogen fuel cell technology in a commercial fleet. Since that launch in 2004, the vehicles - which emit only water -- have driven 34,000 miles making deliveries.

***Biofuel Duo ...... as DuPont and BP have launched a partnership to develop biofuels. Today, biofuels account for less than 2% of global transportation fuels. However, current projects show that biofuels could eventually account for 30% of transportation fuel consumption.  The companies are working with British Sugar to convert the country's 1st ethanol fermentation plant to product biobutanol. Production of biobutanol is expected to include a range of feedstocks such as sugar cane & sugar beet, corn, wheat, or cassava and in the future cellulosic feedstocks such as straw & corn stalks.

***It Made America  ....... as this month we celebrate the 50th Anniversary of President Dwight D. Eisenhower's signing of the Federal-Aid Highway Act in June 1956 that established a "National System of Interstate Highways." Our kids don't know about those narrow state highways & dirt roads. 


***I-35 Nafta Super Corridor......as a new major super-highway, the Trans-Texas Corridor (TTC), is nearing approval by the U.S. Dept. of Transportation. This NAFTA Super Corridor encompasses plans to rebuild I-35 from Laredo, Texas up to Montreal & Vancouver, Canada. As an intermodal means of commerce, the corridor will also include revitalization of railroads from Texas down through Michoacan, Mexico.

***China Surfing Safari ...... as Beijing police detained a gang of thieves on June 23, who pulled off a high-speed, highway heist straight out of a Hollywood action movie. Police patroling a Beijing freeway saw several people "surfing" on top of a van as it pulled alongside a truck loaded with cargo, the Beijing News said. "The men leapt from the van onto the truck's trailer and started throwing back bags of a white-colored substance" into the moving van. After several kilometres, the men leapt back on to the van & sped away. Police later intercepted the van, the thieves and a one-ton cache of polyethylene, used originally in making hula hoops, worth more than US$1,250. The newspaper did not say how the thieves managed to grab their loot undetected by the driver. The polyethylene grab was not the first of its kind -- police have reported several incidents of leapfrog larceny on Beijing's highways in recent years.


  2. The Cargo Letter Financial Page ______

**Atlantic Container Line. UP as net income soared 248% in 2005 to a record 46 million euros (US$55M) from 13.2 million euros in 2004.

**FedEx Corp. UP with best ever 4th quarter & full fiscal year results -- net income of US$568M for its fiscal Q4 ended May 31, up 27% -- for the year net income of US$1.81Bn, up 25%. 

**Shipping Corp. of India. DOWN with net income of INR10.4 billion (US$235M) for its fiscal year ended March 31, down 27% compared to INR14.20 billion in the prior year.  

**Todd Shipyards Corp. DOWN for the quarter ended April 2, 2006, net loss of US$.2M or US$0.03 per diluted share on revenue of $32.7M. 

**UTi Worldwide. DOWN for fiscal 2007 as 1st-quarter profit fell to US$16.6M  or 17 cents a share, from US$17.8M or 18 cents a year ago.     


***Atlas Air Worldwide Holdings, Inc. (AAWW) (Nasdaq: AAWW) has been designated for membership in the Russell 3000 Index on June 30.   

***Pacer International, Inc. (Nasdaq:PACR), the North America logistics & transportation provider, will purchase of up to US$60M of its common stock. This authorization ends on June 15, 2008.                   



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

  3. Freight Forwarder World Air Briefs _____

***Anglo-American Price Fixing? ....... as the U.S. Dept. of Justice and the UK Office of Fair Trading are investigating allegations brought against American Airlines & British Airways over introduction of fuel surcharges. A spokeswoman for BA says the investigation is separate from one initiated earlier this year regarding cartel activity in the airline cargo sector. The UK flag-carrier says that a probe by the U.S. Dept. of Justice and the UK's Office of Fair Trading centers on pricing of passenger air transport, including fuel surcharges. British Airways commercial director Martin George has been given "leave of absence" during the investigation; along with communications chief Iain Burns. A spokeswoman for the operator says that this probe is separate to the one launched earlier this year into alleged cartel activity in the airline cargo sector. American Airlines has received a U.S. federal grand jury subpoena in connection with a government investigation into alleged price-fixing in the air industry.

***Air Transport Continues Rise ....... as cargo shipments jumped 5.4% in April compared with the same month last year, the Air Transport Assn. said. Int'l air freight & express shipments carried by U.S. airlines increased 8% year-on-year in April to 1.15 billion revenue ton-miles. Total RTMs were 2.16 million for the month. A revenue ton-mile is the revenue generated by carrying one ton of freight one mile. Air cargo shipments always have a trucking component, since air carriers use trucks for local & regional ground transportation. The Geneva-based Int'l Air Transport Assn. reported 5.7% growth in worldwide air freight traffic for the first 4 months of 2006.

***Three More Carriers Join Blacklist ...... as the European Commission has added 3 airlines to its blacklist of "unsafe" airlines, restricting or banning them from flying passengers or cargo in the European Union or to operate within European airspace. Surinam-based Blue Wing and Kyrgyzstan-licensed Sky Gate Int'l are now subject to a total ban while Sudan's Air West is subject to operating restrictions. Star Jet, based in Kyrgyzstan, was found to be the same company as Star Air, licensed in Sierra Leone and already banned within the European Union. The EC blacklist.

***U.S. & Chad Open Skies ....... as the countries have concluded a bilateral treaty to open up unrestricted air services between the countries, the Dept. of Transportation said. All-cargo carriers benefit from the agreement because they can now fly to 3rd countries from the other country without first returning to their homeland. The U.S. has concluded 76 open skies agreements, including 17 in Sub-Saharan Africa.

***China Cargo Confidential ....... as a major realignment of the Chinese air cargo market could be underway. Transport Intelligence reports China's Air China Cargo and China Cargo Airlines are set to merge and could take over Hong-Kong-based Dragonair's cargo operations. The creation of a significant Chinese national cargo airline may be underway and that could alter foreign dominance. Market research firm Transport Intelligence has reported that Air China Cargo and China Cargo Airlines plan to merge in Sept. At that time, according to rumors, the resulting company could take over the cargo business of Dragonair. This would create a national champion for Chinese Int'l airfreight, said Transport Intelligence. That market is currently dominated by major global air carriers & parcel carriers.  Cross ownership of the various airlines is a tangled web. Cathay Pacific was formed in 1946 and in 1948 the predecessor of today's Swire Group took a 45% stake in the airline and thus responsibility for managing the airline. Dragonair went into service in 1985 and in 1990, CITIC Pacific, Swire Group & Cathay Pacific purchased an 89% stake in Dragonair.

***The Plot Thickens ....... as Hong Kong-based Cathay Pacific Airways has reached agreement to purchase the remaining 82.21% shares in Hong Kong Dragon Airlines Ltd. (Dragonair) that it does not already own for US$1.06Bn.  To make Dragonair a wholly owned subsidiary, Cathay will take over Air China-subsidiary China National Aviation Co.'s (CNAC) 43.29 shareholding, CITIC Pacific's 28.5%, Swire Pacific's 7.71% share, and another 2.7.% from unspecified others. "Cathay Pacific taking full control of Dragonair and strengthening its partnership with Air China will reinforce Hong Kong's role as the premier aviation hub in the Asia-Pacific region, and create one of the world's strongest airline groupings here in Hong Kong," said Philip Chen, Cathay's chief executive.

***New China Cargo Player ..... as start-up Chinese freight airline Jade Cargo Int'l will begin operations in early Aug. after it receives its first freighter, a Boeing 747-400ER. Jade initially will serve Amsterdam & Seoul 3 times per week from its cargo hub in Shenzen, China. Jade is a joint venture between Shenzen Airlines (51%), Lufthansa Cargo (25%) and a German financial services firm. It is believed to be the only Chinese airline with a foreign ownership stake.

***Traditional Hop Spot Ending? ..... as Lufthansa Cargo has switched its stopover point from Fairbanks, Alaska, to Astana, the capital of Kazakhstan, for all freighter flights to and from Asia. Lufthansa Cargo had used Fairbanks for more than 16 years for flights to and from Japan. "By flying to Astana, Lufthansa Cargo will be able to significantly reduce its flight times to Asia" said Stefan Lauer, Lufthansa Cargo's chairman. Trend?

***Varig In Death Throws? ...... as Brazil's largest airline company, will start a daily flight to London as of Oct. 28, landing at Heathrow's airport TAM operates daily in its direct flight to New York JFK. TAM has also started a daily flight connecting Manaus to Miami. The rise of TAM comes as Brazil's national airline suffered cancellation of the planned sale of flagship Varig airline to a workers' group on June 23, throwing the future of the carrier into limbo and virtually ensuring more travel chaos ahead for ticket holders in Brazil and abroad. Hundreds were stranded June 22, as Varig cancelled 50% of its flights, including all from LAX. The government estimates that 28,000 people are abroad with Varig tickets in near term. Varig is weighed down with a US$3.1Bn debt. The airline has been under bankruptcy protection since early 2005.

***Cathay Pacific Spreads Wings ...... as it will add Stockholm and Toronto to its freighter network in Sept., bringing to 30 the number of online freighter destinations served by the Hong Kong-based airline.

***We Know What's On That Plane? .......... as active RFID tags are being tested by Boeing and FedEx on one of the express carrier's MD-10 Freighters. Created by Identec Solutions, the battery-powered tags hold a microchip & transmitter that operates on an internationally recognized standard frequency, 915 MHz. With their use it's possible to inventory an entire aircraft without opening any doors. Where passive tags typically operate with a 10-foot read range, these active tags may be read at 300-feet. Tags are located throughout the aircraft, including wheel wells, the cargo compartment, avionics compartment and the flight deck.  Truly breakthrough.

***Con-way Clips Its Own Wings ....... as it has closed its domestic airfreight forwarding subsidiary Con-way Forwarding. Con-way expects to take an US$8M charge in the 2nd quarter as a result of closing the airfreight forwarding unit and writing off non-transferable assets, severance costs & lease expense. In the 1st quarter. Witness the end ....

***Singapore Airlines Backs Dreamliner ...... as it has signed a letter of intent to buy 20 Boeing 787-9s, with purchase rights for another 20 of the same aircraft. At current list prices, the value of the 20 firm aircraft is US$4.52Bn. The 787-9 version will have a range of 8,600 to 8,800 nautical miles (15,900 to 16,300 kilometers), and has 20 tons of cargo volume. Boeing said it now has 363 orders and commitments from 26 customers for the 787.

***A380 Super Jumbo Delayed ....... as Toulouse, France-based aircraft manufacturer Airbus has told customers that the delivery schedule for its A380 superjumbo has been put back 6 to 7 months "due to production ramp-up issues." As a result, deliveries of the A380 are likely to be limited to 9 in 2007, with a shortfall of 5 to 9 aircraft deliveries in 2008 & around 5 aircraft in 2009.

***Cathay Pacific Picks The New King ...... as it has placed its largest order for new freighter aircraft with 6 Boeing 747-400 Extended Range Freighters. The Hong Kong-based airline did not disclose financial details. The six 747-400ERFs are scheduled for delivery between May 2008 & April 2009 & will be deployed on trunk routes to North America. The 747-400ERF has a maximum payload of 112,760 kgs and can carry 9,980 kgs more than other 747-400 freighters on long-range flights at maximum takeoff weight. It has a maximum range of 9,200 kilos, about 525 kilos farther than other 747-400 freighters.

***American Airlines Cargo Goes Live ...... as it is accepting bookings through the Unisys-operated Cargo Portal Services (CPS).  The integration with American Airlines' cargo system and CPS went very smoothly & freight forwarders around the world are now able to take advantage of American Airlines' extensive route network when booking shipments, said CPS.

***Double Decker Feeder Solution ...... as Lufthansa Cargo has started using a 2-tier truck on its road feeder service between Munich & Milan, Italy. The airline said the truck can accommodate up to 7 pallets depending on the size & makeup of the palletized freight, raising per-trip capacity by up to 75%. It is also equipped with a unique automatic lifting system. Lufthansa Cargo and FSKey, part of the haulage contractor & handling agent Freschi & Schiavoni Group, took about 7 years to develop the prototype. Great idea!

***Pay Up? ....... as the security fee you pay every time you fly may not be ending up where it's supposed to go. The Dept. of Homeland Security's inspector general has found that airlines are holding on to an estimated US$14.5M every year from the fee -- money that's supposed to go to the Transportation Security Administration. The report also found that security infrastructure fees weren't figured properly. The TSA plans to audit airlines to make sure they pay what they owe.   

***Volumes >>> American Airlines flew 190.2 million system cargo ton-miles in May, a 1.8% rise compared to the 186.9 million system cargo ton-miles carried in the same month last year. >>> British Airways carried 411 million cargo ton-kilometers in May, up 2.3% compared to 401 million cargo ton-kilometers transported in the same month last year. >>> Hong Kong-based Cathay Pacific, poised to take over compatriot airline Dragonair, carried 94,950 tons of cargo in May, up 5.3% compared to the same month 2005. >>> Continental Airlines transported 87.1 million cargo revenue ton-miles in May, a 14.3% increase compared to 76.2 million cargo revenue ton-miles a year ago. >>> Lufthansa Cargo transported 148,000 tons of freight and mail in May, up 4.2 % compared to the same month last year.  >>> United Airlines reported a 1.9% increase in cargo volume for May at 173.7 million system cargo ton-miles, compared to 170.4 million system cargo ton-miles in the same month 2005.

***Freight Forwarder Helps The Kids ...... as BDP International, a global logistics company, headquartered in Philadelphia, PA with local offices at JFK & Bangkok Airports has sponsored the costs of shipping over 50,000 books to needy school children in Thailand on behalf of Thai Book Drive, Inc.

***UPS Rejoins "The Honeymooners"  ........ as the Georgia Aquarium's 2 male whale sharks, Ralph & Norton, have received a special delivery from UPS - 2 females, named Alice & Trixie. UPS previously transported the males to Atlanta 366 days ago. The 2 females were flown more than 8,000 miles on a specially configured UPS B-747 freighter from Taipei, Taiwan, through Anchorage to Atlanta. The whale sharks are 11 & 14 feet in length. Whale sharks are the largest fish on earth, and UPS is the only airline to ever fly the species across the Pacific. To facilitate these intricate moves safely, UPS had to carefully plan the plane's center-of-balance. The 747's interior was reconfigured to secure custom containers with highly advanced marine life support systems and accommodations were added for marine veterinarians traveling aboard. Plans to restart the famous TV show are seen as fishy.



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

  4. FF World Ocean Briefs   

***No West Coast Clog In 2006? ....... as unlike past years, U.S. retail container ports are currently running smoothly and congestion issues, which have previously plagued the ports, will not hamper operations later this summer and into the fall, according to the recently released June Port Tracker report by the National Retail Federation, a national retail trade association, and Global Insight, a provider of economic and financial information.

   ***Didn't Read The June Port Tracker? .... as claiming that even a moderate peak season will mean disruptions for them, particularly in all water shipments to the U.S. East Coast, TSA members instituted a US$400 per 40 foot container (FEU) surcharge on June 15. Beginning July 15, the surcharge will increase to US$500 per FEU for cargo moving from Asia to U.S. East Coast ports via the Suez or Panama Canals. The surcharges will move to US$600 per FEU on Aug. 15 and end on Nov. 30, the end of the peak season period.

***More Alternatives To U.S. West Coast Ports Sought ....... as Kansas City Southern has inaugurated a daily service route from the small Mexican port of Lazaro Cardenas to Laredo, Texas & various points throughout the Midwest and Northeast. Lazaro Cardenas handled fewer cargo containers in all of 2005 than what the ports of Los Angeles & Long Beach handle in a typical week; yet, the deep harbor, direct dockside rail access, additional capacity for growth, and cheap labor make this Mexican port the ideal alternative to the overly congested West  Many say there is a good chance that this will be a viable trade lane for Pacific trade in the U.S.  With Mexico developing a substantial new port at Ensenada -- the trend is clear.

***U.S. West Coast Alternative Continues South ...... as Dubai Ports World is planning to invest US$210M in a new terminal facility in Peru. The Callao Port is the largest container port on the West Coast of South America & handles 90% of Peru's Int'l trade. Callao is the largest & fastest growing container port on the west coast of South America with a compound annual growth rate of over 14% per annum since 2000. DP World will retain 70% ownership of the development company through its subsidiary P&O, while 30% ownership will be held by the Peruvian group Unimar. This is the 3rd venture this month by DP World involving development of a new container port. A new terminal at Callao Port will become the first facility in the Port to be equipped with gantry cranes with 9 in operation by the completion of the project. The trend to diminish U.S. port calls & transshipment points is clear.

***U.S. East Coast Joins In U.S. West Coast Alternative ...... as China is shipping so many goods to the U.S. that the Chinese often find it cheaper to build new containers with low-cost labor and leave their empty ones in the U.S. than send them home empty. The empty containers reflect the changing shape of the U.S. economy as manufacturing goes overseas. Shippers, railroads & real estate companies are scrambling to deal with the fundamental question of how to deal with an increasing flow of shipping containers. Concerned about strained capacity at West Coast ports, shipping companies are looking to East Coast ports for additional routes into the U.S. market. No port is likely to challenge the dominance of the vast complex at Los Angeles-Long Beach, but as imports have seen annual double-digit growth for 3 years, other U.S. ports want to provide additional routes for the growth still to come. The cost will be high. For example, the Massachusetts Port Authority wants to dredge 5 to 10 feet of rock & clay from the bottom of the harbor to allow larger, deeper-floating ships to enter safely. The estimated cost: US$100M. 

Editor Note>> Other U.S. East Coast ports are joining with Mexico & Peru -- in creating alternatives to U.S. West Coast discharge. But take heart -- the increase in expected U.S. West Coast volume over the next 20 years will still leave Long Beach & Los Angeles facing a crisis. Only so much can flow through the same funnel.

***Assault On Carrier Anti-Trust ..... as the Tripartite Shippers' Group, comprising shippers organizations from North America, Europe & Asia, has repeated its call for the outright elimination of the liner carriers' antitrust immunity that permits liner conferences and discussion agreements to collectively set rates & surcharges. The carrier lobby group, the European Liner Affairs Assn., has just delivered to the European Commission its revised proposals for a post-liner conference system in Europe, following the EC's decision in Dec. 2005 to repeal Regulation 4056/86 -- which grants liner conferences an exemption to set common freight rates and cooperate on capacity. The EC is expected later this year to publish its guidelines on the application of the competition rules to the sector and to examine any potential replacement model. Not to be out done, Japan Fair Trade Commission (JFTC) is expected to propose that the country's transport ministry withdraw antitrust immunity for  Japan's 3 liner carriers -- NYK, Mitsui O.S.K., & "K" Line -- obviously resisting any change to their rate-setting privileges. More, the U.S. may soon move to limit many aspects of the liner carriers' antitrust immunity in the 1998 Ocean Shipping Reform Act.

***Germany Captures Russia ...... as ocean German carrier Hamburg Sud will take over vessels operated by Russia's Far Eastern Shipping Co. between Australia/New Zealand and Asia as well as North America starting June 30. Part of an agreement made in March, in which Hamburg Sud bought the assets of Fesco Ocean Management Ltd., including nine chartered vessels with nominal capacity ranging from 1,000 TEUs to 1,750 TEUs and three 2,750-TEU newbuildings due to be delivered in the second half of this year. Hamburg Sud will also take 15,000 containers from FESCO. FESCO & Hamburg Sud had vessel sharing agreements on the FNZEL & FAL services in the Asia/Australasia trade, as well as the PNW and PSW loops between North America and Australasia. Hamburg Sud will now market the services under the brand name Fesco Australia/New Zealand Liner Services. Bookings already made with FESCO, but on vessels about to be controlled by Hamburg Sud, will be passed on to Hamburg Sud for loading and documentation production.

***FMC Chief Steps Down ...... as Steven R. Blust, chairman of the U.S. Federal Maritime Commission, said he will leave his post shortly after his replacement has been confirmed by the Senate. Blust has served as FMC chairman since August 2002. His term expires June 30. Blust intends to return to the maritime industry. Blust is credited with leading the FMC to develop non-vessel-common carrier service arrangements, or NSAs. NSAs allow NVOs to negotiate confidential service arrangements with shippers, much like vessel operators under the 1998 Ocean Shipping Reform Act.

***Warning To Relief Agencies ....... as with fewer U.S-flag vessel operators engaged in transporting Int'l food aid, the U.S. federal government says it's realized a rapid rise in freight rates and a deterioration of service. The U.S. Agency for Int'l Development wants the private voluntary organizations (PVOs), such as CARE, Catholic Relief Services and World Vision, to more closely monitor carrier performance, especially with on-time arrivals, and report these findings back to the agency.  The average freight rate for food aid shipments to East Africa, for example, has risen from about US$104 per ton in April 2004 to more than US$250 per ton today. Some of that increase is due to rising bunker fuel costs. Several carriers dominate the food aid business, namely Maersk and its subsidiary companies, Liberty Shipping Group and Sealift. IMC, a sizable vessel operator in the food aid transport business through 2005, slid into bankruptcy & left the market.

***Evolution Returns Grain To The Sea ...... as falling ocean freight rates are attracting increased movements of U.S. grain to Mexico by water from shippers that formerly used rail, according to the U.S. Dept. of Agriculture's Grain Transportation Report. Cross-border rail grain deliveries to Mexico (4 week running average) are 25% below the same period last year even as Mexico commitments (exports plus unshipped sales) for corn, soybeans, and wheat are up 6%.

***PierPASS Demands Electronic ....... as the nonprofit company that administers the off-peak fee program for containers entering and exiting the ports of Los Angeles & Long Beach, has announced new procedures for handling export containers. Starting Aug. 7 exporters delivering containers during peak hours will be required to claim their booking numbers before the containers arrive at the marine terminals. Under the revised procedure, exporters must claim their booking numbers by visiting the PierPASS Web site and entering the booking numbers into their accounts. payments must be made electronically through the PierPASS Web site by registered users -- no payments are accepted at the terminal gates -- and the cargo owner is responsible for payment of the fee, not the trucking company. Exporters who are not current on their accounts will not be allowed to deliver additional containers.

***Americans Are More "Substantial" ...... as the U.S. Coast Guard has issued voluntary interim measures for certain domestic vessels to account for increased passenger & vessel weight when determining the number of passengers that the vessel can carry with an adequate margin for safety. The total number of passengers permitted on a small passenger vessel is limited by, among other things, stability of the vessel. Predicted stability is based, in part, on the load the vessel is expected to carry while in service. When factoring in the persons expected to be on board, average weights are utilized. For some time now, the Coast Guard and the maritime industry have used an average weight of 160 pounds, except that an average weight of 140 pounds has been used if the vessel operates exclusively on protected waters and the passenger load consists of men, women, & children. The Center for Disease Control & Prevention (CDC) recently reported that the average weight of persons in the U.S. has increased dramatically in the last 40 years. [Note: Global warming is a possible, but unlikely, cause.] The Coast Guard has commenced a rulemaking to determine an appropriate average per person weight to utilize in determining vessel stability. In the interim, it is recommended that owners & operators of small passenger vessels, pontoon vessels, and similar craft use an assumed weight of 185 pounds per person when determining vessel stability. Given plans by McDonalds to launch the new "Half Pounder" sandwich next Spring, U.S. Coast Guard officials are planning for passengers to travel in their own 3 foot ocean containers after FY 2008.   

***Glowing In The Ditch ...... as the Panama Canal Authority issued an Advisory stating that, effective Aug. 1, 2006, insurance policies for vessels transiting the Canal while carrying radioactive cargoes must include the Panama Canal Authority as an Additional Named Assured. This would require actual endorsement to the insurance policy, not just word from the local insurance agent.

***Matson Navigation Expands The Pacific ..... as it is upgrading its service to eastern Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI) effective Aug. 4 by introducing a new biweekly liner service from Guam. Matson is chartering a 425-foot vessel for the new feeder service, which will call at Ebeye, Kwajalein, Majuro, Kosrae, Pohnpei and Chuuk. The Jones Act carrier has offered a monthly service to the Marshall Islands from Honolulu via the container barge Islander and a 21-day service from Guam to Kosrae, Pohnpei & Chuuk via a connecting carrier agreement.

***Building Giants ....... as Israel's Zim Integrated Shipping Services will spend US$1Bn on four 10,000-TEU ships and four 8,200-TEU vessels from Korea's Hyundai Heavy Industries. The new ships, due for delivery in the 2nd half of 2009, are much larger than Zim's current largest ships in operation which have a capacity of about 5,000 TEUs. Zim is the world's 15th-largest ocean carrier with a fleet capacity of about 220,000 TEUs.

***We Will Never Forget ........ as Avondale dockyard lies on the banks of the Mississippi River close to New Orleans where ships have been built at the yard for decades, but the amphibious assault ship LPD 21, a billion-dollar warship, is different. It has been especially commissioned by the US Navy. When it sets sail in 2008 it will be the USS New York (LPD 21) and carry with it the motto "Never Forget." The USS New York will set sail in 2008 and will have the capacity to carry 1,000 soldiers as well as helicopters and hovercraft.

***Throughput >>> Port of Long Beach handled 644,066 TEUs in May, up 14% compared to 564,886 TEUs handled in the same month last year. >>> Singapore state-owned global terminal operator PSA Int'l handled 20.17 million TEUs globally in the first five months of 2006, up 31.3%.

***FMC Revokes 9 OTI Licenses ....... as for failure to maintain valid bonds, the firms are American National Shipping Line, Queens Village, N.Y.; Aras Int'l, National City, Calif.; E.I.B. Brokers, Miami; Great Way Trading & Transportation of South San Francisco, Calif.; JP Express Shipping in Bronx, N.Y.; Krystal Logistics USA, Miami; Peninsula Cargo, Paramount, Calif.; Topocean Consolidation Services (New York), Valley Stream, N.Y.; & Worldwide Exhibition Services, New York.

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

1813 - 15 U.S. gunboats engage 3 British ships in Hampton Roads, Va.

1865 - Confederate raider Shenandoah fires last shot of American Civil War in Bering Strait.

1870 - USS Mohican burns Mexican pirate ship Forward.

1881 - USS Jeannette crushed in Arctic ice pack.

1884 - Congress authorizes commissioning of Naval Academy graduates as Ensigns.

1933 - Commissioning of USS Macon, Navy's last dirigible.

1945 - Okinawa declared secure after most costly naval campaign in history. U.S. had 30 ships sunk & 223 damaged, mostly from kamikaze attacks, with 5,000 dead & 5,000 wounded, while Japanese lost 100,000 dead.

1953 - Navy ships evacuate 20,000 Koreans from West Coast Islands to safety S. of 17th parallel.

1959 - 28 naval vessels sail from Atlantic to Great Lakes, marking the formal opening of Saint Lawrence Seaway to seagoing ships.

1962 - Naval Facilities Engineering Command Cape Hatteras makes 1st Sound Surveillance System (SOSUS) detection of a Soviet diesel submarine.

1985 - Steelworker 2nd Class Robert D. Stethem of Underwater Construction Team 1, killed by militant Shi'ite hijackers of TWA Flight 847. He received a Bronze Star for his heroism.  

***Pay Me, I Was Drunk ....... as a man who was quarantined along with 59 other passengers who fell ill on an Australian cruise ship says he deserves a refund because he wasn't sick, just hung over. P&O Cruises Australia' M/V Pacific Sun docked in Sydney June 9, after outbreak of gastroenteritis sickened dozens of passengers during a 10-night cruise along Queensland state coast. Sick passengers quarantined to prevent the gastroenteritis, which causes vomiting & diarrhea, from spreading. But passenger Michael Wanless said he was wrongly quarantined after doctors confused his hangover for the illness. "Quarantine me, that's fair enough, but I think that I'm entitled to be reimbursed for that part of the trip," he told the Australian Broadcasting Corp.. M/V Pacific Sun to be sanitized in Sydney, and P&O was providing free medical treatment to all infected passengers. Stop me before I drink again!   

***Impaired Maritime Flight .... as pelicans suspected of being drunk on sea algae were being tested at a S. California wildlife center June 25, after one of them crashed headlong into a car. Three of the California brown pelicans were found wandering dazed in the streets of Laguna Beach after another pelican struck a vehicle's windshield on a nearby coast road. It suffered internal injuries and a long gash in its pouch & was undergoing toxicology tests. Officials at the Wildlife Care Center said seabirds may have been under the influence of algae in the ocean that can produce domoic acid poisoning when eaten. The other pelicans were rounded up after a wildlife director warned the public to be on the lookout for birds acting "drunk," disoriented or being in an unusual place. Shellfish tainted with domoic acid was thought to be the culprit behind a 1961 attack of seabirds on people and cars in the oceanside California town of Capitola that inspired Alfred Hitchcock's horror movie "The Birds."                                  



   5. The Cargo Letter Cargo Damage Dispatches                        

          **Back By Popular Demand**

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

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. You will be amazed.

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

See our new feature for May 2006: "Vine Ripened Tires"

See our newest photo feature "Singles Only" - Transportation Disasters Told In A Single Photo!

Our new features were not quite ready to post for this edition, but get ready for:

       "Happy Landings"

       "Full Speed Ahead"

       "Where The Tradewinds Blow"

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..............

Country of Origin Food Labeling Brochure .........advice for Australian consumers 

Drum Handling Videos ........ free.

European Commission &endash; Green Paper on Integrated Maritime Policy

European Commission Green Paper: "Towards a Future Maritime Policy for the Union: A European Vision for the Oceans & Seas,"

How to Beat the Peak-Season Blues

Lift Truck Articles

Panama Canal &endash; Operations Summary &endash; May 2006

Panama Canal Expansion Plans

Panama Canal New Locks

Singapore ........... cooperative maritime security  in the Malacca & Singapore Straits.

Surviving The China Supply Chain Riptide

University of Connecticut - Master of Professional Studies - Homeland Security Leadership ........ distance-learning courses.



2006 U.S. Customs House Guide

2006 Special 75th Anniversary Edition of "Scandinavian Shipowners & Ship Management Companies" Directory

Environmental Regulatory Advisor

Supervisor's Guide to Human Resources



Transport Events

World Trade Organization Events

Air Cargo India 2006 ........ Nov. 16-18, 2006, World Trade Center in Mumbai.

Council of Supply Chain Management Professionals .......... 15-18 Oct. 2006 Henry B. Gonzalez Convention Center, San Antonio, Texas

EAA AirVenture Oshkosh 2006 ....... July 24-30, 2006

Emergency Port Preparation & Response -- AAPA ........ July 11 - 13 in Portland, Oregon


Freight Russia 2006 ......... 24 - 26 Oct. 2006, Expocentr, Moscow, Russia

G8 Summit ........... 15 July, St. Petersburg, Russia

Global Automotive Logistics 2006 ......... 17- 18 Oct. 2006, Hilton, Antwerp, Belgium

Global Supply Chain Excellence: The Importance of IT Infrastructure ........... Webcast -- Thurs., July 13 at 2pm EDT

Intermodal Exhibition & Conference 2006 ........... 5-7 Dec. 2006, Hamburg Messe, Hamburg, Germany

The Next Generation of Lift Truck Productivity ........ Video Webcast Available On-Demand

Shipbuilding-Machinery & Marine Technology Int'l Trade Fair ..........Sept. 26-29, 2006 -- Hamburg, Germany.

TOC2006 Americas ......24 - 26 Oct. 2006, Fairmont Princess, Acapulco, Mexico

Towing Vessel Inspection Working Group of the Towing Safety Advisory Committee (TSAC) ..........  July 19 & 20, Arlington, Virginia.

Transtec 2006................ 25-28 Sept. 2006,Int'l Euro-Asian conferences on transport, St Petersburg, Russia

Underwater Vehicle Showcase (UUVS) ........ 27th-28th Sept. 2006, National Oceanography Center, Southampton, UK.


FOR FUN>>>>>>>>>

Beautiful Earth

Energy Hog

Evinrude E-Tec

Flight Aware! ....... Want to find out what's overhead?  ........ register-- it's free.

Phil Hendrie ......... the show has ended ... sadly.

Lockheed Martin C-5M Super Galaxy Makes 1st Flight

USS Midway Museum Ship

Spirit of Innovation ...... the new blimp named.



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

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

Dynegy Midstream Services, LP v. Trammochem

U.S. 2nd Circuit Court of Appeals

June 13, 2006, No. 05-3544-cv

Arbitration Act does not authorize nationwide service of process - The Federal Arbitration Act does not authorize nationwide service of process. In the instant case, maritime arbitrators issued a subpoena directing a non-party in another state to produce documents and electronic data. The subpoena was ignored and a motion was filed in federal court to compel compliance. On appeal, the court held that the law evidences a Congressional intent to protect entities that are not party to an arbitration from having to participate in the arbitration to a greater extent than they would if the dispute had been filed in a court of law. Opinion  


Fortis Corporate Insurance v. Viken Ship Management

U.S. 6th Circuit Cout of Appeals

June 8, 2006, No. 05-3792

Where a defendant has purposefully availed itself of the forum state, it may be subject to personal jurisdiction for court actions brought in the state. In the instant case, defendant Norwegian ship owner entered into a long-term charter that included the obligation to carry cargoes to and from various ports in the Great Lakes, including Toledo, Ohio. Its ships were rigged specially to travel to the Great Lakes, with the option to crop and replace the masts in order to safely trade to Toledo. Ships owned by the defendant made numerous voyages to the Great Lakes. While the ship was on a voyage from Europe to Toledo, seawater entered the hold and the cargo of steel coils incurred severe rust damage. The insurer of the cargo brought suit against the ship owner in federal court in Ohio. The ship owner asserted that it was not subject to the personal jurisdiction of the court. On appeal, the court found that the ship owner had purposefully availed itself of the benefits of the forum state when it agreed to undertake specific obligations to trade to the Great Lakes in general and Toledo in particular. Further, delivery of the cargo in Toledo was sufficient to show that the cause of action arose in the forum state. Under the circumstances, exercise of personal jurisdiction over the foreign ship owner by a federal court in Ohio was found to be reasonable. Opinion   


Quincy Commerce Center, LLC v. Maritime Administration

U.S. 1st Circuit Court of Appeals

June 9, 2006, No. 05-1527

Forfeiture principle in administrative law -- forfeiture principle precludes a party from challenging in court a federal agency's action on a ground that it did not raise during the prior administrative process. In the instant case, the Maritime Administration (MARAD) planned to sell at auction the assets of the defunct Fore River Shipyard in Quincy, Massachusetts. Plaintiff was one of the bidders. In its bid, plaintiff stated that it intended to use the property as a "vital center of commercial activity" including "maritime industry," but was otherwise not forthcoming in its communications to MARAD regarding its plans for the property. After another bidder was determined by MARAD to have prevailed at the auction, plaintiff brought suit, alleging, among other things, that MARAD violated the Merchant Marine Act of 1936 by failing to conduct the auction so as to foster the merchant marine. Specifically, plaintiff asserted that it was the only bidder that intended to operate the property as a shipyard and should have been declared the winner on that basis. The court found that there was nothing in the administrative record to show that MARAD was made aware of the specific intent to plaintiff and that plaintiff had failed to advise MARAD of either its specific intent or of its position that the auction should be structured to favor such intent. The court held that the actions of a federal agency normally cannot be challenged by a participant unless the agency has had an opportunity during the administrative process to consider the grounds on which the challenge is based. Opinion


Anchor Shipping Co. v. Alianca Navegacao e Logistica Ltda

U.S. Federal Martitime Commission

May 10, 2006 Docket No. 02-04

Complaint allowed following successful arbitration -- vacating the dismissal order issued by an Administrative Law Judge, the Federal Maritime Commission (FMC) ruled that a complainant should be allowed an opportunity to assert before the Commission various allegations that a non-vessel-operating common carrier (NVOCC) violated the Shipping Act of 1984, even though the same basic allegations were raised in a prior arbitration proceeding. The Commission will not, though, look into disputes previously addressed in the arbitration proceeding that are based upon common law breach of contract claims. 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

Libby Thompson (Countryman & McDaniel)


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