Law Offices of Countryman & McDaniel


Air & Ocean Logistics - Customs Broker News

29 January 2009


Good Thursday 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." This Month: The financial crisis deepens & Lufthansa tries to buy everything!
For Jan. 2009 -- Theme -- The Transport Industry Financial Gloom Sets In & Lines Downsize.

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.

The Cargo Letter Archives of Past Issues
Michael S. McDaniel, Editor, Countryman & McDaniel - Trade, Transport, Hull & Machinery 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***


***CargoLaw Named Best Content ....... as the Countryman & McDaniel website has been named "Best Legal Marketing Website Ever" and "2008 Best Captivating Content" by Avvo, the leading U.S. legal research & lawyer database. We are proud of this recognition as the support of you readers now runs over 18 million hits to our website each month. See also

***Cargo Law Ship's Store .... get your "Ship Happens!" gear.

***Chinese Lunar New Year .... as most factories & offices in mainland China & Hong Kong will be closed from Jan. 25-31, 2009.

***Somber Market Prediction ..... as the U.S. economy will post negative productivity of at least 5% for the 4th quarter and will contract by more than 3% in the 1st quarter of 2009, the U.S. Chamber of Commerce predicts. The economy should bottom out halfway through the year, but further problems in the credit markets or other external shocks could prolong the recession. The job market is also grim, with the unemployment rate expected to reach 8.5% to 9% later this year, the chamber said. The chamber repeated its support for action to open more foreign markets, completion of the multilateral Doha trade agreement and strengthening Trade Adjustment Assistance. Government should help small businesses become exporters by significantly boosting export promotion programs geared to small companies. The business organization also wants to open trade with Cuba and further reform of export controls to streamline licensing, especially to support defense and security cooperation with U..S. allies. It said further infrastructure investment from the private sector could be unlocked by removing legal & regulatory impediments. The chamber will oppose other union-backed measures to mandate paid sick leave, impose ergonomics rules or have government arbitrators force contracts down the throats of employers. These ideas add up to one thing -- the elimination of American jobs, according to the group. Further Reaing. See Also.

***Sino Textile Stall ...... as for the 1st time in a decade, China's textile industry won't see profit growth. Slowing overseas demand for Chinese textiles in 2008 saw the industry make 1.8% less in profits from Jan. through Nov., according to numbers from China's National Bureau of Statistics. The numbers for Dec. are not expected to salvage the year. It would be the 1st time since before China's accession to the WTO that profits haven't grown year to year. The industry made US$15.3Bn in those 11 months, but many firms were pushed into the red as exports to Europe & North America slowed to a relative crawl in the 2nd half of 2008.

***Vietnam Textile Crisis ...... as only 20% to 30% of its apparel manufacturing companies will survive 2009, suggests a report from the Vietnam Textile & Apparel Assn. While some garment makers have enough orders to ensure jobs through the 1st quarter of the year, others have received only enough orders to meet half production capacity, while some have received no orders at all. Orders from the U.S. have declined 20% to 30%. Clearly, a buyers market!

***New SED Penalties Set ..... as U.S. Customs & Border Protection has posted penalty guidelines, effective Feb. 1, for enforcing recent Census Bureau rules requiring exporters & forwarders to electronically file export declarations (SED) before cargo is loaded on a transport conveyance. Penalties run to US$10,000. CBP said 1st-time violators are likely to receive a warning or informational letter reminding the company about the new rules. See the schedule:

***U.S. Broker Reporting Update ...... as U.S. Customs & Border Protection (Customs, CBP) has published a Frequently Asked Questions (FAQ) document online addressing the provisions of title 19 of the Code of Federal Regulations, Part 111.30(d), which states that every licensed U.S. Customs broker must file a status report & pay a corresponding US$100 fee to CBP every 3 years. See sample form:

***Hopeful Brokers Deadline Approaches ..... as the 1st Customs Broker License Exam. Customs for 2009 will be held on Monday, April 6, 2009 at various locations throughout the U.S. Applications to take the exam are due on or before March 6, 2009.

***UPS Makes 16 More Countries "Local" ..... as it has increased the number of countries in which it offers domestic express pickup & delivery from 29 to 45. The nations involved in the expansion are Algeria, Argentina, Chile, Cyprus, Czech Republic, Hungary, Kazakhstan, Kenya, Malta, Pakistan, Romania, Saudi Arabia, Serbia, South Africa, Ukraine & U.A.E. Shippers would have the benefit of using a single carrier, if they wish, and using UPS systems for tracking & billing both domestic & int'l shipments, it noted. UPS now offers int'l package delivery service into & out of more than 200 countries and territories.

***Real Change, Not Just Gas ..... as just two months after a failed bid to convince California voters to pay US$5Bn to convert heavy-duty trucks throughout the state to run on natural gas, billionaire oil & natural gas magnate T. Boone Pickens said he plans to ask the federal government for up to US$28Bn from the economic stimulus plan to do the same nationwide. Pickens, who has argued that the plan would cut dependence on foreign oil by shifting to domestically produced natural gas, said he has discussed the federal handout with Congressional leaders. Pickens' plan calls for the initial conversion of about 350,000 heavy-duty diesel trucks to natural gas engines, at a cost of US$75,000 per vehicle. Pickens claims the pilot program would create just over 450,000 jobs & cut foreign oil imports by more than 5%. The trucking industry has cited a lack of natural gas fueling stations and delivery infrastructure as an impediment to switching to the fuel.

***What Does He Know? ..... as Billionaire investor Warren Buffett's firm, Berkshire Hathaway, has completed the purchase of just over 4.3 million shares of Class I rail carrier Burlington Northern Santa Fe Corp. stock. The sale was listed at just over US$271M. Berkshire Hathaway increased its stake in Fort Worth, Texas-based BNSF to more than 74 million shares, and now controls 21.8% of the nation's 2nd-largest railroad.

***Faster Route To Russian Pacific ....... as the companies Vladivostok Container Terminal, Russkaya Troyka and Dalreftrans started operating a regular joint weekly container express train between Vladivostok & Moscow on 10 Dec. The transit time is expected to be 12 days. The service will be made more attractive through the reduction of storage costs for containers in the Vladivostok terminal.

***Austria In Private Rail Trend ...... as it could partly privatize Rail Cargo Austria, the cargo unit of its state railway system OeBB. Rail Cargo Austria, which earlier this month completed the purchase of Hungary's state railway MAVs cargo unit, says it is Europe's 3rd biggest rail cargo operator, after the freight divisions of the German and the French state railways.

***Not In My Backyard ..... as the future of a massive proposed Union Pacific switching yard near Phoenix remains uncertain, with supporters & detractors awaiting a state review of the plan. UP's plans to build the switching yard on a 6-mile 913-acre parcel near Picacho Peak, 70 miles south of Phoenix. The state-owned parcel is currently leased to the Kai family that farms the parcel. The Kais have become one of the leading detractors of the UP plan, leading a 2-year effort to convince local residents that the switching yard will create a great amount of pollution & threaten both the state park surrounding desolate Picacho Peak.

***Fast & Electric ..... as freight trains with axle weights of over 20 tons may now travel at 100 km/h instead of only 80 km/h on all suitable routes in Switzerland. The Federal Office of Transport said this would optimise the use of the country's railway infrastructure. See. And

***FedEx Freight Sets A Deadline ..... as the provider of regional less-than-truckload services offers a new product with 10:30 a.m. delivery time backed by a money-back guarantee. The new U.S. service, FedEx Freight A.M., can be selected by customers online, on the bill of lading, or at pick up. FedEx said the service will be priced with a flat rate.

***The Navigators Group Goes Direct ...... as the transport insurer has announced the launch of Navigators Logistics Insurance Services, a division of Navigators Management Company, Inc. This new division will focus on servicing the insurance needs of those U.S. based freight forwarders and other 3rd-party logistics providers who prefer a direct business relationship with their insurer. "Navigators is a leading Insurer in the Freight Forwarder/Logistics industry. With the disruption in this niche market among both the specialty brokers & underwriters, many of our insureds have expressed the desire for a stable & more direct relationship with their insurer," said Michael Civisca, President of the Marine Division of Navigators Management Company. "We have formed this new unit as part of our commitment to providing superb customer service to our logistics industry clients, whether through our internet-based cargo insurance products or the other specialty property/casualty insurance products designed for this industry niche. As our U.S. customers have become increasingly concerned about the financial strength of their insurance carriers, Navigators' 'A' financial strength rating provides them with peace of mind."

***Avalon Risk Management To Canada ..... as the transport insurance broker has announced the opening of its 1st int'l office in Mississauga (Toronto), Ontario. Avalon Risk Management (Canada), Inc. was established to meet the growing demand for Avalon's services throughout Canada & the global needs of its logistics clients.

***That Old "Tractor Parts" Scam .... as Turkey is holding a suspicious shipment at the Port of Mersin, sent from Iran & bound for Venezuela, "because it contained lab equipment capable of producing explosives," according to a Reuters report. Customs authorities in Turkey intercepted the shipment among a 22-container consignment labeled as "tractor parts." The shipment was brought to Turkey by truck from Iran, where it was due to travel by ocean to Venezuela. The cargo contained no traces of radioactive material, but did contain some chemicals marked as dangerous. Iranian & Venezuelan companies are involved in numerous joint ventures in Venezuela, including tractor & car assembly plants, while the countries have also agreed to jointly develop petrochemical projects. Both countries are also political enemies of the U.S.

***Road Salt In The Wound ..... as the Macedonian government has renamed a main highway after the ancient Macedonian conqueror Alexander the Great, whose ethnic origin is one part of the thorny 17-year dispute between Macedonia and its southern neighbor Greece over the name of "Macedonia." Greece has a province by the same name. The dispute dates from the early 1990s, after Macedonia broke away from socialist Yugoslavia. Greece blockaded the new state, forcing Macedonia to change its flag & its constitution in order to end the embargo & eventually sign an interim UN accord. In Nov., Macedonia announced that it is taking Greece to the Int'l Court of Justice in The Hague (Netherlands), arguing that Athens broke the 1995 accord when it blocked Macedonia's Nato invitation.


  2. The Cargo Letter Financial Page ___________

**China Shipping Container Line. DOWN as it estimates net profit attributable to shareholders for 2008 will decrease more than 50% from 2007 when it had net profit of US$486M. China Shipping operates a fleet of 142 vessels with aggregate capacity of 446,678 TEU.

**Forward Air. DOWN as it expects 4th quarter estimate to 27 cents to 29 cents per share from 40 cents to 44 cents.

**Union Pacific. UP as net income increased 35% to US$661M in 4th quarter 2008.

**Southwest Airlines. UP for 36th consecutive year with full year 2008 net income of US$178M, or US$.24 per share, compared to US$645M, or US$.84 per share, for full year 2007.

**The Shanghai Int'l Port Group. UP with a 27% net profit increase in 2008 to US$674M.   



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

3. Freight Forwarder World Air Briefs __________  

***Worst Cargo Year Since 911 .... as airlines experienced a 13.5% drop in int'l cargo volumes during Nov., reflecting the global decline in business activity & consumer demand for goods during the current economic crisis, the Int'l Air Transport Assn. said. It is the largest fall in cargo business since 2001 in the aftermath of the terrorist attacks on the U.S. Carriers based in the Asia-Pacific region saw freight traffic fall by 16.9%, more than in any other region. The development is expected to severely dent 4th-quarter profits for these airlines, which depend on cargo for a larger share of their revenue than their rivals in other parts of the world. Double-digit freight declines were also experienced by Latin American carriers (-15.7%), North American carriers (-14.4%) & European carriers (-11%). Freight traffic for Middle Eastern carriers turned negative (-1.6%), following 1% growth in Oct. African carriers, while being the only region posting freight growth (2.2%), saw a decline from the 3% growth posted in Oct. IATA Director General Giovanni Bisignani called the figures "shocking."

***Hedging Doubles The Pain ..... as shares in Cathay Pacific Airways Ltd. fell sharply in early Jan. after Asia's 3rd-largest carrier said it could lose nearly US$1Bn from hedging its jet fuel costs, adding to the toll on global airlines from bad bets on oil prices. The airline said its unrealized losses from hedging contracts as of year's end had soared to US$980M as oil prices slumped in recent months. That's almost triple the US$361M hedging loss the carrier had reported as of Oct. 31. Last year Southwest Airlines profited greatly from hedging before gas prices soared. Timing is everything.

***China Regroups .... as the parent company of China Eastern Airlines will receive a capital injection of US$812.3M from the PRC state. The airline already received US$438.7M from the state at an earlier date. The latest subsidy is intended to improve the carrier's bottom line & ensure that operations can be maintained. China Eastern's parent company will use the capital to sell new shares worth US$210M. The government is considering whether to merge China Eastern & the smaller Chinese carrier Shanghai Airlines.

***More Cargo Price Fixing .... as the cargo division of Chile's LAN Airlines said Jan. 22, it will pay a US$88M fine as part of a plea agreement with the U.S. Justice Dept. to charges of fixing prices of cargo rates & fuel surcharges. Eight other airlines -- British Airways, Korean Air, Air France-KLM, Japan Airlines, Qantas, Cathay Pacific, SAS & Martinair/Tampa -- have pleaded guilty and paid fines totaling US$1.27Bn. At least 30 airlines have been investigated by U.S. & EU authorities. LAN Cargo said the payments, to be made over a 5-year period, would not significantly affect the company's cash position. The Chilean carrier had previously set aside US$75M in reserves to cover any potential penalties. Asia, Australia, the EU, New Zealand & now South America -- and you thought all the pricing was fair & competitive.

***New Bolivian Wings ..... as it will launch a new state airline this month, filling a gap left by last year's collapse of its privatized flag carrier Lloyd Aereo, as President Evo Morales steps up his control of the economy. The nascent airline, called Boliviana de Aviacion, or BoA, took delivery of its 1st two aircraft by the end of 2008. BoA will initially only cover domestic routes, but the company is already considering international flights in the medium term. BoA's chief competitor will be Aerosur.

***Welcome -- Air Cargo Germany? ..... as a new all-cargo carrier, was scheduled for take off at Germany's Frankfurt Hahn airport at the beginning of Jan., has delayed its planned launch until the 2nd half of Feb. The company will operate two Boeing B747-400 freighters converted from passenger aircraft. They're hiring.

***Cast Your Annual Vote Now ..... as it is that time of year again - the cargo airlines will all be competing for your vote, and a chance to win an award in the 21st Annual Freddie Awards. The first Freddie award ceremony was held in 1988 and was named after commercial aviation pioneer Sir Freddie Laker. Sir Freddie passed away in 2006, but his name lives on in these awards.

***Political Trouble In The Home of Democracy ....... as the Libyan civil aviation authorities have revoked Swiss Int'l Air Lines' right to land in Tripoli. The flights were said to have been stopped for "technical reasons associated with a project at Tripoli airport". Diplomatic relations between Libya & Switzerland have been strained since July.

***Singapore & Brazil Ready To Deal .... as they have reached an agreement on air services that will likely result in direct air links between the 2 nations. The bilateral agreement permits the operation of 7 weekly air cargo services for Singaporean carriers, as well as for their Brazilian counterparts. The Civil Aviation Authority of Singapore said that it is also working towards liberalizing air service agreements with other South American countries. Singapore Air needs new markets, as its capacities are underutilized -- and as Asian trade feels the financial crisis.

***Positive Sign of Iraqi Freedom ..... as Lebanon & Iraq recently signed an air transport agreement, allowing Middle Eastern airlines to resume flights between the countries. Agreement puts an end to old aviation issues between the nations.

***DHL Takes Caribbean Bio Stake ..... as located in Puerto Rico, the new Life Science Competency Center enhances DHL Global Forwarding's abilities by offering services specifically to meet the shipping needs of pharmaceutical, biotechnical & medical device manufacturers. DHL is developing Life Sciences Competency Centers at select airports around the world at which there are larger shipment volumes requiring specialized handling. At the Puerto Rican facility the company will be adding temperature & humidity control rooms during 2009 to the existing warehousing space that incorporates the latest in technology & security systems.

***Boeing 777 Freighter Project Gets A Boost .... as FedEx Express has decided to exercise its option to purchase an additional fifteen 777 freighters, Boeing announced Jan. 14. The Memphis, Tenn., courier recently postponed delivery of its 1st shipment of fifteen 777s for a year or more because of a downturn in business. The planes are scheduled for delivery over the course of 3 years, beginning in 2010. FedEx is the largest customer so far for the new 777 freighter, an amazing aircraft.

***Flying On Nuts -- Real Eco Change At Hand ...... as on Jan.7, Continental Airlines flew a Boeing 737 from Houston in a circle over the Gulf of Mexico. Nothing too special about that, except that this flight was a test of a new 50/50 jet fuel/biofuel mixture, powering one of the engines. The bio portion of the fuel was a mix of algae & jatropha oil, an alternative fuel that can be grown in poor soil, yet is able to produce more yields than soybean. The fuel was approved for aviation use last year and meets or exceeds all requirements for a jet fuel. The jet was not the 1st biofuel powered airplane. Early last year, Virgin Atlantic flew a 747 from London to Amsterdam powered partially by coconut oil. Most experts agree that the aviation industry will have to invest heavily in finding alternative fuels, but given how much is at stake during these trials it is understandable that they take things kind of slow. Read about Jatropha Oil.

***The Airbus A380 - An Inconvenient Truth..... as she has been in service for over 16 months and a total of 13 of these monsters have been delivered to airlines around the world. One of those airlines is Qantas, which uses the aircraft on its Sydney-Los Angeles route. Los Angeles Int'l Airport has had to make special arrangements for the superjumbo, including shutting down service roads & halting other aircraft on taxiways when the plane is being positioned. The wingspan of the A380 is so big that it actually intrudes on the safety zone on either side of the tarmac. When the A380 is ready for takeoff, air traffic controllers make sure their tower is fully staffed and the plane receives priority over any other traffic. The plane is so big, that when it prepares to take off in bad weather, the tower tries to let it get airborne as soon as possible to prevent its jumbo size from blocking radio transmissions from airport towers. The Qantas A380 is configured with 450 seats &endash; 14 individual First Class suites, 72 in Business Class, 32 in the Premium Economy Class & 332 in Economy Class. See the A-380 outside our window.

***Dawn of The Jet Age, Now Middle Aged ..... as the age of accessible, affordable jet passenger travel began this month, 50 years ago, when American Airlines made the 1st scheduled, nonstop flight from California to New York, Jan. 25. The aircraft that made the service possible was the Boeing 707, based on previous bomber & aerial tanker designs by the company. The new plane made coast-to-coast flights about 3 hours quicker than airliners powered by piston engines. The round-trip ticket cost was US$231 &emdash; about 25% cheaper than previous flights. Today, more than 2.5 million people each year fly the route between New York & Los Angeles. You can find these and more facts about America from the U.S. Census Bureau:

***"Pizzas 4 Patriots" - Giving Our Guys The Superbowl ....... DHL will deliver thousands of freshly frozen pizzas to U.S. servicemen & women serving throughout Iraq & Afghanistan in time for Super Bowl XLIII celebrations. In 2008, a suburban Chicago Veteran, MSgt. Mark Evans, was inspired by his son's idea to send thousands of pizzas to the troops in time for July 4th celebrations in Iraq & Afghanistan. This year he's continuing his family's mission by organizing the delivery of more than 2,000 pizzas for Super Bowl celebrations. Evans collected enough donations to purchase all of the pizzas, provided below cost by Lou Malnati's Pizzeria of Northbrook, Illinois. DHL, which flies directly to many of the U.S. bases in Iraq, has agreed to donate its shipping services for delivery of the pizzas. Thousands of pizza's packaged in temperature-controlled containers were picked up Jan. 23, at Lou Malnati's Pizzeria, & loaded onto DHL trucks. The shipment flies from JFK Airport in New York directly to the Middle East, with delivery to military bases just in time for Super Bowl celebrations. We have contributed -- now you.

***Volumes >>> British Airways reported a 14.3% drop in cargo volumes, measured in ton kilometers, in Dec.,2008 the total was 360 million tkm. >>> Cathay Pacific & sister airline Dragonair saw cargo volume drop 23.9% to 115,232 tons in Dec., compared to the same month in 2007. >>> Los Angeles Int'l Airport, the 4th-busiest U.S. airport, saw a 13.5 % decline in air cargo volumes during 2008, as air cargo moving through last year, including mail & freight, fell from 2.08 million tons in 2007 to 1.8 million tons in 2008.   

***Less Curry - More Discussion ..... as Indian pilots have a new weapon to combat mid-flight fatigue: talking with their cabin crew. India's aviation regulator, the Directorate General of Civil Aviation (DGCA), has issued some guidelines after recent incidents of pilots dozing off & veering off their flight paths, the Hindustan Times newspaper reported. The orders instruct cabin crews of all domestic airlines to talk to pilots every half hour to keep them awake and to keep speaker volume high, so pilots can hear air traffic controllers. The instructions also reiterate general safety measures for cabin crew, such as taking regular rest periods & limiting the length of each shift. Last year, the pilots of a Mumbai-bound Air India flight reportedly fell asleep & overshot their destination. An official with the DGCA denied that there was a problem with Indian pilots falling asleep and said it was normal for the cockpit crew to feel drowsy.

***Saving Our Fat Selves ...... as increasing obesity has prompted an Australian state to seek larger planes for the country's famous "Royal Flying Doctor Service," ambulance and government officials said. New South Wales state has just put out a tender to assess the cost of obtaining two larger new planes for its air ambulance fleet, which is flown under contract by the Royal Flying Doctor Service to service remote & rural areas. Recent global surveys have repeatedly highlighted Australians as among the most obese people in the world, despite the country's association with an active, healthy lifestyle & love of sport. The two new planes would be able to carry patients up to 573 lb, nearly twice the current limit of 308 lb, a spokeswoman said. A New South Wales ambulance service spokeswoman said it followed similar moves by other parts of the service, including ground ambulances & helicopters, to accommodate larger patients. Asked if the move was prompted by increasing levels of obesity, a spokesperson said: "Essentially, yes." We are doomed.           



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

  4. FF World Ocean Briefs   

***Vessels Laid Up & Capacity Tightens ...... as capacity on the major east-west container routes has dropped 11.5% in 5 months, from 916,000 TEUs on Aug. 1 to 812,000 TEUs on Jan. 1, information service AXS-Alphaliner said. Capacity on the routes between Far East & European/Mediterranean has fallen 16% to 351,00 TEUs per week, with 30,000 TEUs in weekly capacity removed in Dec. alone. Capacity between the Far East & North America is down 9% to 342,500 TEUs per week, while North America/North Europe & Med are down 2.5% to 118,000 TEUs per week. AXS Alphaliner said layups by carriers continue to mount. Some 210 cellular ships are idle with about 550,000 TEUs of capacity, up from about 420,000 TEUs two weeks ago. They represent 4.5% of the existing cellular fleet in TEUs. Around 125 of the 210 ships are charter market vessels without charter, awaiting an employment. They include big ships on major east-west routes and smaller ships used as feeders or on regional routes, it said.

***Carriers Move To Stabilize Freight Rates ...... as in its latest Container Forecast, Drewry Shipping Consultants notes 4 container operators failed in 2008 and more could be casualties of the weak market in 2009. During the last quarter of 2008, carriers have been doing their best to reduce capacity through suspension of a number of high profile east/west services, said the Drewry report. However, the gap between supply & demand is still too big, it continued. For the short to medium term, carriers can, at best, only stabilize freight rates that, on the Asia to Europe trade, have recently fallen to uncommercial levels. The group's revised estimate for 2008 global container traffic growth is 152.8 million twenty-foot-equivalent units (TEUs), representing a 7.2% year-on-year growth. This is lower than the 8.6% Drewry published in its Sept. report. The growth rate for 2009 was a meager 2.8%. Drewry's 4th quarter 2008 Container Forecaster suggests that previous long-held industry rules have changed or become skewed. This is because the downturn happened so dramatically that supply/demand mechanics in all trades have faltered at the same time. There are no bright lights left for the industry, said Drewry. There are very few positives at the moment, apart from the fact that bunker prices have greatly reduced & scrapping levels have increased. Carriers are continually re-assessing their capacity deployment strategies, as it seems that the recent suspension of a number of east-west strings is still not bringing the supply/demand balance back into line in order to stabilize freight rate erosion. The lay-up of ships is a last course of action for the industry, but it will become more of a feature throughout 2009 as cascading of tonnage can no longer be seen as an effective capacity management tool.

***Lower Fuel Prices Add To Carriers Woes ...... as the trend could add pressure to the container shipping trades rather than bring relief to ocean carriers. Should bunker costs return to lower levels for a sustained period of time, slow steaming may no longer make economic sense. That could release more spare tonnage into a market that is already saturated with too much capacity. When oil prices soared last year, many lines operating in the longhaul Asia-Europe trades found it made commercial sense to reduce ship speeds and then charter an additional vessel in order to maintain weekly schedules. In some cases, the usual 8 ship loops were expanded to 10 vessels. But, some experts are now questioning whether that business model will remain viable as fuel prices decline. AXS-Alphaliner has drawn attention to the downside impact of lower bunker prices in its latest estimate of containership lay-ups that are already at an all-time high & increasing by the day. The firm puts the number of boxships currently idle at 675,000 TEU, equivalent to 5.5% of the cellular fleet, and expects the figure of 750,000 TEU to be reached by early Feb. The amount of unemployed boxship capacity has already topped the previous peak of 5% in 1986 when the US Lines' fleet was at anchor after the company went bankrupt. Idle capacity has risen very rapidly over the past 3 months from just 70 ships of 150,000 TEU out of action in late Oct. Of the 255 vessels now without work, 148 are idle charter market ships, according to AXS-Alphaliner. Altogether last year, just over 88,000 TEU was deleted, with the number forecast to rise to 120,000 TEU in 2009 and a provisional 70,000 TEU in 2010.

***U.S. Cargo Volume Falls ...... as at the major U.S. retail container ports throughput was 15.3 million TEUs in 2008, 7.1% less than in 2007, the lowest level since 2004 when 14 million TEU moved through the ports. The National Retail Federation and IHS Global Insight said their monthly Port Tracker report found year-over-year volumes fell for the 17th straight month in Dec. U.S. ports surveyed handled 1.23 million TEUs in Nov., the last month for which actual numbers are available. That was down 10.3% from the 2008 peak of 1.37 million TEUs set in Oct. and down 11.8% from Nov. 2007. Dec. was estimated at 1.2 million TEUs, down 6.4% from Dec. 2007. The last month to see a year-over-year increase was July 2007, when the 1.44 million TEUs moved through the ports was up 3.4% from July 2006. Looking forward, Port Tracker said Jan. is forecast at 1.16 million TEUs, down 6.3% from Jan. 2008; and Feb. is forecast at 1.1 million TEUs, down 11.1% from 2008. March is expected to be up 1.1% from a year earlier at 1.17 million TEUs, but April is expected to decline 2.6% from 2008 at 1.23 million TEUs. May is forecast at 1.25 million TEUs, down 4% from last year. 

***Wan Hai & Pacific Int'l Lines Downsize ...... as they will end their China Transpacific Service at the end of Feb. and take slots on a similar "K" Line service. The two carriers in Oct. downsized capacity by 40% on the service. PIL & Wan Hai in Dec. suspended a Far East/North Europe service & took slots on a COSCO service.

***Matson Navigation Co. Shrinks ...... as the U.S. mainland-to-Hawaii container carrier said it plans to reduce its non-union workforce by about 60 positions, or 10%, augmenting position eliminations that resulted from hiring freezes adopted in 2007 & 2008. Matson's announcement follows one in Nov. that it would reduce its non-union workforce by at least 10%, eliminating at least 70 of 700 jobs as part of an effort to reduce annual labor costs US$7M to US$10M.

***Maersk Braces ..... as the decline in world economy will affect the flagship of Danish business A.P. Moller-Maersk particularly hard. That is what the finance cooperation Carnegie predicts in a new analysis, concluding that world giant Maersk will loose 50% of its profit in 2009

***Fair Horizons? .... as in a filing with the U.S. Securities & Exchange Commission Jan. 8, Giovine Capital Group said it has amassed 1.57 million shares, or 5.2% of the stock of Jones Act carrier Horizon Lines. The company was formed 1998 by Thomas A. Giovine and acts as an investment advisor for a group of hedge funds, according to information on an alumni Web site at Wharton Business School. Giovine is based in Charlotte, N.C., where Horizon is headquartered. In August, a big Boston-based investor, Seth Klarman, trimmed his holdings in Horizon. In a filing with the SEC Klarman's company, Baupost said it had reduced its holdings to 13.2%, down from about 23.25% of Horizon's stock in May. Horizon's stock closed at US$3.65 on Jan. 9 and reached a high in July 2007 of US$36.55. 

***Port of Singapore Hit By1st Fall Since 2001 ...... as it saw volume plummet in Dec., resulting in year-end volumes that just barely kept the port the world's busiest. Volume fell 14 % in Dec. versus the same month in 2007, continuing the downward trend that afflicted nearly every major Asian port in the last quarter of 2008. Volume fell 1.5% in Nov., the first time Singapore had seen a decline in any particular month since 2001. However, Singapore's volume for the year rose 7% to 29.9 million TEUs, just above the 28 million TEUs handled by Shanghai last year.  

***Pacific Ports Throughput Plunges ..... as Long Beach reported a fall in total container traffic last year of 11%, the biggest single year decline for more than 20 years, with throughput plunging 25% in Dec. to the lowest monthly total since Feb. 2005 -- while neighbouring port of Los Angeles posted a 6% contraction last year after the Dec. total plummeted by 15%. The turnround has been sudden, with Long Beach recording its busiest year ever in 2007 as container traffic soared to 7.3m teu, although imports were already slowing by the middle of the year after the U.S. housing market collapsed. Last year, the port saw total volumes decline to 6.5m TEU, with exports as well imports sharply down. As the recession spread to overseas markets, loaded outbound containers from Long Beach contracted by 23% in Nov. and then by a colossal 34% in Dec. The pattern was similar in Los Angeles, where total container traffic fell to 7.8m TEU last year from 8.4m in 2007, with loaded export boxes sliding 26% in Dec. Across the Pacific, shippers expect Hong Kong's container throughput to fall 10% this year. The port handled 24.2m TEU in 2008, up 1% from the previous year, and managed to retain 3rd place in the world's container port league.  

***Controversial Program Begins ...... as the Port of Long Beach will begin collecting a Clean Trucks Fee beginning Feb. 18 "to accelerate the replacement of thousands of polluting cargo trucks." The move will come 5 days after a Federal Maritime Commission review period of the program is due to end. To facilitate collections of the fees, the port will initiate an electronic gate access system that will enable the fee collection & improve security at shipping terminals, the port said. The Clean Trucks Fee is expected to raise about US$1M a day or about US$1Bn over the next few years at both San Pedro Bay ports to help finance the replacement of many of the 17,000 trucks that are a leading source of air pollution in Southern California. Collection of the fee was scheduled to begin in November, but was delayed twice due to FMC review. Beginning Oct. 1, the port began banning the most polluting trucks in the region -- vehicles manufactured prior to 1989. On Jan. 1, 2010, the port will ban 1993 and older trucks, & un-retrofitted model year 1994 to 2003 trucks. By Jan. 2012, all vehicles 2006 and older will be banned. The West Coast Marine Terminal Operator Agreement (WCMTOA) created the not-for-profit company PortCheck to collect the Clean Trucks Fee for the ports of Long Beach & Los Angeles. The money collected will be transferred to the ports to provide financial assistance for the replacement of thousands of trucks during the next 3 years. Under the program, the cargo owner is responsible for paying the Clean Trucks Fee. The fee will be payable by credit card or electronic funds transfer, and must be paid before a container can enter or leave the terminals. PierPass

***U.S. Great Lakes Join Downward Spiral ..... as with a majority of the nation's blast furnaces idled, the iron ore trade on the Great Lakes took what the Lake Carriers Association called "one of its biggest plunges in surely what are decades. Shipments totaled only 3.1 million net tons, a decrease of 42% compared to a year ago. The comparison with the month's 5-year average was even worse: Shipments were down nearly 50%. Due to very strong demand for iron ore until just a couple months ago, for the year the trade increased 1.1 million tons over 2007. Shipments also out performed the trade's 5-year average by 400,000 tons.

***Neptune Orient Line Sails Into The Desert ...... as the Singapore-based global container transportation & logistics group, will relocate its Americas regional headquarters to the greater Phoenix, AZ (USA) area during the 2nd half of 2009. The company said the move from its traditional headquarters in Oakland CA (USA) to Arizona should be completed during the 3rd quarter of the year.

***Rays of Hope ...... as the world's 1st cargo ship partly propelled by solar power has set sail from Japan, aiming to cut fuel costs & carbon emissions for automakers exporting their products. The M/V Auriga Leader, a 200 mt. freighter developed by NYK Line, Japan's largest line, has been equipped with 328 solar panels at a cost of US$1.68M. The solar power system can generate 40 kilowatts, which will initially cover only 0.2% of the ship's energy consumption for propulsion, but company officials said they hope to raise the contribution.

***Biggest Pirate Victim Is Freed ..... as Somali pirates released the Saudi-owned oil super tanker M/T Sirius Star on Jan. 9, after a ransom of US$3M was paid. A small plane apparently dropping the ransom by parachute to the tanker. The ship is owned by Vela, the shipping arm of Saudi Aramco, and was carrying a full load of about 2 million barrels of oil when it was attacked 450 miles off the coast of Africa Nov. 15. It was the biggest vessel ever to be hijacked. Last year, more than 100 ships were hijacked in the Gulf of Aden and other waters around Somalia. The crew of 25 Croatian, British, Philippine, Polish & Saudi Arabian merchant mariners have been held hostage since the attack. Amazing photos. Bombs away! Our Photo Feature 

***Stranded Crew ...... as a South Korean-owned & Panamanian-flagged vessel unloading palm oil at the Port of Chennai has been stranded by bankruptcy, Indian news outlets reported Jan. 21. The M/V Golden Freesia arrived in Chennai in mid-Dec. to discharge its cargo, but then could not leave because the ship's owners had failed to pay port, pilotage and bunker fees of a few thousand dollars. The ship's agent, James Mackintosh & Co., demanded the port & pilotage charges, but the ship's owners, First Shipping, declared they had no funds to clear their dues. Since then, the vessel, with 25 crew aboard, has been stranded in waters just outside the harbor, but within the Chennai Port Trust's jurisdiction. This is only one of many stranded vessels in the current downturn.

***Shameful Jailing Ends ..... as two ship officers jailed by a South Korean court for their part in that country's worst oil spill have been bailed by the Seoul Supreme Court. Capt. Jasprit Chawla and Chief Officer Syam Chetan were in charge of the anchored (not moving) oil tanker M/T Hebei Spirit when a barge collided with the tanker in rough seas Dec. 7, 2007. The officers have been held since the incident and, though exonerated by a South Korean court in summer 2008, were found guilty by an appeals court in Dec. The case has garnered the attention of the worldwide shipping industry, with representatives from Intertanko, the Hong Kong Shipowners Assn. and transport worker labor unions blasting the appeals decision. Those groups have alleged that Chawla & Chetan were made scapegoats.

***Race of The Tall Ships..... as in a rare circumnavigation of the Atlantic Ocean, the American Sail Training Association of Newport, RI in tandem with Sail Training Int'l of Gosport, England announced the Tall Ships Atlantic Challenge for sail training sailing ships from around the world. Appropriately dubbed the "Race of the Decade," the Tall Ships Atlantic Challenge will be the first sailing competition to visit both sides of the North Atlantic Ocean. It commences in Vigo, Spain on April 30 and then makes stops in Tenerife, Canary Islands (May 14-17) and Bermuda, which will be celebrating its 400th anniversary (June 12 -15). Charleston, SC (June 26-28) and Boston, MA (July 8 -13) are the two exclusive stops in the U.S. The North American leg wraps up in Halifax, Nova Scotia (July 16-20). The race culminates in Belfast, Northern Ireland (August 13-16). In all, depending on the race leg, over 40 vessels from around the world will log more than 7,000 miles on the open seas. Ships expected to participate include the U.S. Coast Guard Eagle (295'), Uruguay's S/V Capitan Miranda (205') & S/V Europa (185') from the Netherlands, to name a few. Follow the action:

***Throughput Grows For Some >>> Port of Antwerp (Belgium) handled 190 million tons of freight last year, 4% more than in 2007 -- a 7th record in a row, and container volume increased 6% to 8.6 million TEUs in 2008. >>> India's biggest container port, the Jawaharlal Nehru-Nhava Sheva complex, saw volume rise 7.4% in 2008 to 4.2 million TEUs -- in all Indian ports saw a 30% dip in container trade in the last 3 months of 2008 compared to the same period in 2007. >>> Port of Montreal handled about 1.46 million TEUs in 2008, 7.2% more than 2007. >>> PSA Int'l at Singapore, rose 7% to 29 million TEUs >>> Port of Rotterdam (NL) increased throughput to the record level of 420 million tons in 2008, 2.7% more than in 2007. >>> Tianjin Port, in the top 6 for tonnage, saw container volume grow nearly 20% in 2008, to 8.5 million TEUs.

***Recuse Redux ..... as less than 36 hours after a dramatic rescue after capsizing in treacherous waters off Cape Horn, French round-the-world yachtsman Jean Le Cam had to be rescued again. Le Cam was sailing to Ushuaia in southern Argentina on Jan. 7, aboard the yacht of fellow-Frenchman Vincent Riou, who rescued him after he was trapped in his upturned hull for hours, when the mast snapped & the engine failed. The accident left the pair drifting 86 miles southeast of Port Williams in Chile's far south. Chile's navy, which had abandoned an earlier rescue bid for Le Cam on Jan. 6, after he clambered aboard Riou's yacht, sent a vessel overnight to rescue the two yachtsmen. Le Cam & Riou had been competing in the Vendee Globe solo yacht race.      



   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 Jan.. 2009: "The Taking of M/T Biscaglia" - combat photos!

See our new feature for Jan.. 2009: "Miracle On The Hudson" - the water landing of Flight 1549

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

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

Cargo & Trade>>>>>>

2009 Container Trends Crystal Ball

Do Export Controls Affect U.S. Parts Use? ....... the Bureau of Industry & Security (BIS) is seeking public comment

How to Negotiate Ocean Carrier Contracts

How To Request Your Homeland Security Travel File ....... what's in your file?

How to Streamline Import Documentation

South African Chamber of Commerce in America

South Africa Trade 

Turkey Foreign Trade

Turkish American Chamber of Commerce, Industry & Maritime Trade 

U.S. Consumer Product Safety Commission - Testing Lead Content of Children's Metal Jewelry

U.S. Customs "Automated Commercial Environment (ACE) Portal Reports Dictionary" ...... individual report dictionaries for Brokers, Carriers & Importers

U.S. Dept. of Commerce Trade Agreements 

U.S. Food & Drug Administration Good Importer Practices

World Bank Business Environment Snapshots ..... world geopolitical info

World Trade Organization (WTO) Trade Agreement Database




Long Range Wireless Data



Transport Events

Trade Shows, Exhibitions, Conferences & Business Events Worldwide

World Trade Organization Events

Cargo Claims Handling, Loss Prevention & Security Seminar - Law Offices of Countryman & McDaniel - The Asia Business Forum...... Feb. 9-10 2009, JW Mariott Hotel, Singapore. COME JOIN US!!

Cargo Claims Handling, Loss Prevention & Security Seminar - Law Offices of Countryman & McDaniel - The Asia Business Forum ...... Feb. 11-12 200, Grand Copthorne Waterfront Hotel, Kuala Lumpur. Malaysia. COME JOIN US!!

JAXPORT 2009 Logistics and Intermodal Conference ...... March 17, 2009, Amelia Island Plantation, Florida.

MARAD Approved Maritime Security Awareness Classes

Maritime Vietnam 2009 ......... 25-27 Feb. 2009, Saigon Exhibition & Convention Center

ProMat 2009 ....... Jan. 12-15, 2009, Chicago's McCormick Place

Tackling Piracy at Sea Conference .... 18 - 19 March 2009, London, UK

Terminal Operations Conference & Exhibition for Asia ......March 3-5 2009, Shenzhen

U.S. Dept. of Agriculture (USDA) Animal & Plant Health Inspection Service (APHIS) Updated information On "Lacey Act"

U.S. Exports Conference ......Feb. 4&endash;5, New York City

Washington Union Station's Centennial Celebration

7th 3PL Summit ...... June 22-24, 2009, Atlanta

9th Annual Trans-Pacific Maritime Conference ...... March 2 & 3, 2009, Los Angeles

10th Logistics Forum Duisburg ....... March 4-5, 2009, Mercator Hall, Duisburg 

2009 US Exports Conference ........ 4-5 Feb., Grand Hyastt, New York

Air & Expedited Motor Carriers Assn...... 8-10 March, Las Vegas, Nev.

American Apparel & Footwear Assn. Seminars On Product Safety & Quality Control ..... March 26-27 in Dongguan & March 30-31 in Hangzhou

Annual U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) Conference ....... April 1-3, 2009, New Orleans

Annual IWLA Convention ...... 8-10 March, St. Petersburg, Fla.

Big Bay Whale Days - Feb. 21 & 22, 2009, San Diego

Cargo Claims Handling, Loss Prevention & Security Seminar - Law Offices of Countryman & McDaniel - The Asia Business Forum...... Feb. 9-10 2009, JW Mariott Hotel, Singapore. COME JOIN US!!

Cargo Claims Handling, Loss Prevention & Security Seminar - Law Offices of Countryman & McDaniel - The Asia Business Forum ...... Feb. 11-12 200, Grand Copthorne Waterfront Hotel, Kuala Lumpur. Malaysia. COME JOIN US!!

JAXPORT 2009 Logistics and Intermodal Conference ...... March 17, 2009, Amelia Island Plantation, Florida.

MARAD Approved Maritime Security Awareness Classes

Maritime Vietnam 2009 ......... 25-27 Feb. 2009, Saigon Exhibition & Convention Center

Northern Border Customs Brokers Assn. Annual Metting ..... 9-11 Feb, Fort Myers, Fla.

Tackling Piracy at Sea Conference .... 18-19 March 2009, London, UK

Terminal Operations Conference & Exhibition for Asia ......March 3-5 2009, Shenzhen

Transportation & Logistics Council 35th Annual Conference ........ March 22-25, 2009, St. Louis, Missouri

U.S. Customs "10 + 2" Outreach Events Scheduled in 2009

U.S. Dept. of Agriculture (USDA) Animal & Plant Health Inspection Service (APHIS) Updated information On "Lacey Act"

U.S. Exports Conference ......Feb. 4&endash;5, New York City

Washington Union Station's Centennial Celebration


Free Wesbcast>>>>>>>>>

U.S. Importer Security Filing (10+2) ......presented by Avalon Risk Management

Trade Management Systems Benchmark Study: Status Quo - At What Cost?



200 Million Science Pages

Air Sprots TV ....... live air racing

Another Reason To Visit Norway ....... amazing

The Best Job In The World ...... job currently available

Competitive Intelligence - A Selective Resource Guide

Docking Perfection ....... a maritime game

GoToDaily ......online coupons, deals, discounts, & hard-to-find promotional offers

History of Traffic Calming More

Indian Pilot Forgets To Load Enough Fuel For His Flight

Lake Aircraft Assets For Sale ..... only FAA-certified single-engine amphibious airplane produced in the world

The Last Dahlek .... a Dr. Who thing


Ocen Express ....... the game

Poodwaddle World Clock .....like nothing you have seen before

Road Test: Google Public Transit Maps On the iPhone

Slingbox Solo .... you may need one

Speed Cushions

Somali Pirates To Acquire Citigroup ...... could be an improvement

Track This News Now ...... a map allows you to search for news stories in various countries & then see how they are being covered in news media around the world.

Use Two Search Engines At One - Save Time & Compare



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

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

Rexroth Hydraudyne B.V. v. Ocean World Lines, Inc.

U.S. 2nd Circuit Court of Appeals

547 F.3d 351, Nov. 6, 2008)

COGSA Limits Liability for Misdelivery on Inland Rail-Carrier Leg -- Carmack Not Applicable -- Rexroth Hydraudyne B.V. contracted with Ocean World Lines, Inc. (OWL) to transport 27 packages of parts to a flight simulator from Rotterdam to the ultimate consignee Training Devices Int'l Inc. (TDI) in Colorado, via the Port of Houston. OWL contracted with Cosco Container Lines Co. to arrange for transportation to Houston, and Cosco's U.S. agent was to transport the goods from there to TDI in Colorado.

After the cargo arrived in Denver but was awaiting Customs clearance, Hydraudyne instructed OWL to hold the cargo and not release it to TDI because TDI had defaulted on its payments. OWL accepted these instructions but after a period of time the cargo was improperly released by Cosco for delivery to TDI. TDI went into bankruptcy & did not pay for the cargo.

OWL & Cosco admitted there was a breach of the contract for carriage. However, OWL's bill of lading limited its liability to US$500 per package as permitted by the Carriage of Goods by Sea Act (COGSA), and extended COGSA beyond the time the good were discharged from the ship. It also extended the limitation to OWL's agents and subcontractors. The Cosco transport bill of lading stated that carriage to or through U.S. ports would be subject to COGSA and its waybill provided that the shipper accepted all terms including the package limitation.

OWL brought a declaratory judgment against Hydraudyne and Cosco to limit its liability to US$500 per package as provided by COGSA. That lawsuit was eventually discontinued and Hydraudyne pursued its action in U.S. District Court (S.D.N.Y.), seeking recovery for its loss on the parts from OWL and Cosco. The District Court granted summary judgment limiting the defendants' liability to $500 per package in accordance with COGSA and Hydraudyne appealed.

The 2nd Circuit noted that Hydraudyne was attempting to overcome the COGSA terms by urging application of the Interstate Commerce Act, and then the Carmack Amendment. However, the Court held that the defendants were not "rail carriers" subject to the Carmack Amendment. Both OWL and Cosco provided transportation by water between the U.S. and foreign countries. A contractual provision extending COGSA terms inland yields to Carmack if Carmack is applicable. The Court held that Carmack was not applicable here, in that Carmack does not cover losses to a shipment during the inland leg of a continuous international shipment.

OWL did not qualify as a "rail carrier" under Carmack because OWL did not actually transport or handle the goods but, rather, contracted for Cosco to do so. Cosco, in turn, contracted for Union Pacific to perform the rail transport. The Court held that entities that provide either the ocean portion of an international journey or rail carrier arrangement for a domestic portion of an international journey could raise contract-based protections set forth in COGSA and limit their liability where the injury to the shipment occurs during the domestic portion of the international journey.

The Court also held that the misdelivery of cargo in this case was a result of negligence and did not bar protection from COGSA. The negligence did not rise to the level of criminality or corruption which would bar COGSA protection. The Court affirmed the lower court's holding & limited liability to US$500 per package.


In re Omega Protein, Inc.

U.S. 5th Circuit Court of Appeals

548 F.3d 361, Nov. 10, 2008

Fishing Vessel Collides With Oil Platform; Both at Fault -- This case arose from a collision between a 396-ton fishing vessel and an oil platform owned by Samson Contour Energy. The vessel was owned by Omega Protein Inc. and was equipped with various navigational aids, including autopilot, radar (with anti-collision alarm) and a computerized navigation chart system. The boat was operated by a Capt. who had been accident-free for 20 years.

On the night of the collision, an error occurred with the vessel's refrigeration system while the captain was navigating, and the captain stepped away from the helm to turn on the wheelhouse lights, examine the refrigerators and use his cell phone to order a replacement part. About 10 to 15 minutes after the captain left the helm, the vessel struck the platform. Crew members of the vessel said there were no lights or fog horn operating on the platform. The captain had no training from Omega on how to use the radar, or when to use the anti-collision alarm, and he had not read the radar manual.

After a bench trial, the District Court (W.D. La.) found that Samson committed a statutory violation by no operating lights on the platform, and the vessel captain violated COLREGS by not keeping a proper lookout, and Omega could limit its liability to that of the captain as it exercised reasonable care in selecting him as captain. The Court thus determined Omega and Samson equally at fault. Samson appealed.

The 5th Circuit held that the lower court's finding that Samson committed a statutory violation by failing to light the platform was not clearly erroneous. There were no neutral witnesses to speak to the platform being lit and, because the evidence was at best in equipoise, it would be wrong to overturn the lower court. Because Omega proved sufficiently that the platform was not lit and thus demonstrated contributory fault, the maritime presumption that the moving object caused the allision did not apply.

Next, the Court held that it was not clearly erroneous for the lower court to hold that the allision was also caused by the captain's failure to use the navigational aids. Samson argued that the fault lay directly with Omega. not the captain, because the navigational aids were outdated and the captain had not received proper training. The Court rejected this argument. There was no evidence to support the first part and, as to the second part, the captain said he scanned the horizon before he turned on the wheelhouse lights and saw nothing. If the lights of the platform had been on, he would have seen them, as the night was clear and visibility good; so the lack of lights contributed to the collision.

Additionally, the equal apportionment of fault was appropriate. The lower court weighed the evidence and arrived at a permissible conclusion. 

Last, the Court affirmed that Omega was entitled to limited liability. If the accident was caused by mere mistakes of navigation, then the company can limit liability. The Court found this was the proper holding in this case because the Capt. did not have a poor record and the lack of use of the navigational aids played no role in the collision. The judgment of the District Court was affirmed.


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)

Maria Payne (Countryman & McDaniel)

Christoph Whaner, Esq. (Countryman & McDaniel)


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