The Cargo Letter
THE CARGO LETTER 
Air & Ocean Freight Forwarder - Customs Broker News
26 January 2000
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.'' Quite sadly, we have new Pirate news & a great deal of loss at
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
Michael S. McDaniel, Editor & Publisher, Countryman & McDaniel,
forwarder/broker attorneys at LAX.
INDEX to The Cargo Letter:
OUR "A" Section: Trade, Financial & Inland News
1. Freight Forwarder Trade Briefs
2. The Cargo Letter Financial Page
OUR "B" Section: FF World Air 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. Port Truckers Ruled Independent
* All U.S. Ports Look On
8. Pirate Attacks Up 40% For 1999
* Reuters Continues The Watch
- Transport Professionals Were Ist To Greet 2000 ............ as the
crew aboard Cathay Pacific flight CX888 from Hong Kong to Vancouver were
some of the 1st people in the world to travel into the new millennium,
before returning a few minutes later to the previous century. The plane
departed from Hong Kong Int'l Airport at 1.42 PM Hong Kong time on Fri. Dec.
31, with approximately 120 passengers on board. The aircraft flew into Jan.
1, 2000 at a point just west of the Int'l dateline (longitude 180 degrees)
over the mid-Pacific Ocean. Minutes later, it flew over the Int'l dateline
back into 1999. The aircraft was scheduled to arrive in Vancouver at 2055
local time, giving passengers plenty of time to prepare for a 2nd and more
lasting celebration in North America. Before the flight departed Capt.
Malcolm Lewendon said: "It's quite exciting to make a little piece of
history like this. But most of our passengers will probably slept through
it." indeed, we all did.
- We Found One! ........ as that rarest of all world problems, a Y2K
shipping glitch, has been identified. During the 1st week in Jan. Brazil's
key Port Santos experienced a computer hiccup in its customs process related
to the so-called Y2K bug, but authorities said it was not hampering South
America's busiest seaport. The port, through which 35 million tons of cargo
move each year, had reprogramed its computers last July to read dates with a
4 digit instead of 2 digit number for the year to avoid the bug reading
"00" as "1900" and not "2000." But after Dec.
31, the new program failed to recognize customs registrations issued from
the old system. For some fun check out the Y2K Mistakes page: http://go.to/y2kmistakes
- 3PL Follows The Wave .......... as third party contract logistics
(3PL) services grew 16.5% in 1999, according to Armstrong & Associates
Inc., a logistics management consulting firm. The results were based on an
analysis of 38 industry leaders accounting for more 50% of U.S. revenues.
The consultant expects overall growth to continue in the 15% to 20% range
for the next 3 to 4 years. Many Fortune 500 companies have not outsourced
transportation, warehouse & inventory management functions that are not
parts of their core competencies. In addition, Armstrong points out that
many small & midsize companies are the right size too have their
integrated supply chains managed by a single, contract logistics company.
E-commerce fulfillment will expand the roles of traditional 3PLs and merger
& acquisition activities will continue to change the 3PL landscape, the
consultant said. Domestic management & dedicated contract carriage grew
18% while warehouse-based integrated services grew 16%. Non-asset-based
Int'l transport management grew at 11%, as the Asian economic difficulties
eased. U.S.-based 3PLs earned US$46B in total revenue. New profitability was
5% and net 3PL revenues were US$25B, Armstrong said.
- Indians Out of The Doghouse .......... as the U.S. Commerce Dept.
will remove sanctions against 51 Indian companies. The sanctions were
imposed last year after India exploded nuclear devices in retaliation for
similar detonations by Pakistan. Commerce said it decided to take this
action based on a recent decision by the Clinton Administration to focus
more on Indian companies which have direct ties to nuclear weapons
development. The rule will take effect once published in the Federal
Register. The Administration says it will continue to adjust the list of
sanctioned Indian & Pakistani firms & products. The list of Indian
firms removed from Commerce's sanctions list may be viewed on the web site. http://www.bxa.doc.gov/entities/the51list.
- South Out of Hock ......... as South Korea's exports are expected
to rise to US$157B, up 8.9% from last year, while imports are likely to
increase to US$144B, 20.3% higher than last year, the Commerce, Industry
& Energy Ministry said. It said the trade surplus would be lower this
year due to a sharp rise in imports as a result of an expanded economy.
Exports last year increased 9% to US$44.2B while imports jumped 28.3% to
US$19.7B for a trade surplus of US$4.5B for the 2nd consecutive year,
following surplus of US$9B in 1998.
- The Philippines Recovers ........... as 1999 has seen a 19% rise in
exports over the previous year. From Jan. to Nov. the figure was also 19% up
which indicates a constant & healthy export industry. Components &
electronics accounted for 52% of the goods exported & in Nov., these
were up by 16% to stand at US$1.59B. Exports in total rose by over US$3B for
the 1st 11 months of the year bringing the total figure up to over US$32B
- Brazil Reconsiders .......... as it has decided to drop plans to
tax all Int'l freight by as much as 15%. The Baltic and Int'l Maritime
Council, a group of 2,500 ocean carriers & ship agents, appealed to the
Brazilian government to rescind these plans. "The tax would have had
adverse effects on both imports & exports in the country," said
Thomas Timlen of BIMCO. Tax legislation introduced earlier this year calling
for a withholding tax of 25% on payments made from Brazilian shippers to
foreign carriers remains in effect. "Fortunately, we have received no
reports of any carrier facing such large tax deductions," Timlen said.
- Don't Take Any Wooden Sucres ......... as President Mahuad of
Ecuador announced on 10 Jan. the decision of his government, backed by most
political parties in the country, to "dollarize" its economy.
Consequently, under his fast track plan the Sucre would have been replaced
in 30 days by U.S. Dollars drawn from the country's Int'l reserves. The
Sucre would have remained in circulation at a parity rate estimated by
Mahuad at 25,000 Sucres per Dollar. The radical move came after a critical
year for Ecuador's economy which forced defaults on current, Brady &
Euro bond foreign debt & saw the Sucre's 500% devaluation. Well, the
public was so overjoyed with the plan that President Mahuad was overthrown
last week & a new government installed. World Sucres collectors have
announced an end to hoarding.
- Yankee Go Home? But You Others Stay? .......... as U.S.S. Tortuga
& U.S .S. Nashville with 450 Marine & Navy engineers are being held
back from a flood relief mission to Venezuela, whose president said he
doesn't want help from American troops. A Pentagon spokesman said on Jan. 11
that the Tortuga was being turned back on route to Venezuela & the
Nashville would not leave Moorhead, NC, after President Hugo Chavez told
reporters he didn't want the assistance. Meanwhile, U.S. relief efforts with
4 helicopters & water purification units continues with about 120 U.S.
soldiers involved in those operations. At the State Dept., spokesman James
P. Rubin said, "We're asking the government of Venezuela for
clarification." He cited a Dec. 24 letter in which Venezuela's defense
minister "specifically requested the assistance of U.S. military
engineers to open up a humanitarian corridor for flood-ravaged coastal
communities." Chavez's government earlier welcomed U.S. help, including
soldiers who have been operating water purification facilities and flying,
Blackhawk helicopters, C-130 cargo planes & a C-5 Galaxy cargo plane.
The Tortuga & Nashville were to transport bulldozers, tractors &
engineering equipment along with the troops to operate and maintain them.
Pres. Chavez told reporters that while Venezuela still seeks money,
equipment and other materials, additional relief workers are not needed.
Chavez, a former army paratrooper elected a year ago, has been accused by
opponents of using the floods & killer mudslides to consolidate his
power. In the chaotic aftermath of the disaster, he has eliminated Congress,
replaced the Supreme Court & appointed other top officials. Since his
election, Chavez has improved relations with communist Cuba & has been
critical of U.S. global influence. He earlier refused to allow U.S. planes
to fly over Venezuela in anti-narcotics operations. We think that perhaps
Persident Chavez should begin to expand his collection of Sucres. On 11 Jan.
Atlas Air donated the 1st jumbo freighter relief flight into Valencia,
Venezuela to assist victims.
- UrMexFTA? .......... as Mexico has signed a new trade agreement
with Uruguay. The countries have concurred on particular trade aspects
allowing both of them relative freedom on both way trade taxes. Mexico will
now be free to export 78% of its products to the South American country
exempt from customs duties, while 96% of imports into Mexico from Uruguay
will enjoy the same privilege. This individual agreement between the
countries stems from the inability of the North American Free Trade
Agreement to form closer ties with Mercosur. NAFTA consists of Mexico,
Canada & the U.S., while Mercosur comprises Uruguay, Paraguay, Argentina
- South Pacific For Free? ........... as a plan to abolish import
taxes later this year is under consideration by the Marshall Islands.
Finance Minister Tony deBrum said that if adopted the measure would help
bring the country in line with a proposed South Pacific Free Trade Zone
& eliminate the rising costs of enforcing the import taxes. They also
want to concentrate on those stamp & coin ventures.
- Jordon To WTO? ......... as the 17 Dec. Meeting of the General
Council agreed to the accession of Jordan to the WTO. The Hashemite Kingdom
of Jordan concludes in this way 5 years of negotiations during which it has
undertaken major reforms of its economy, laws & institutions in order to
promote greater trade & investment. It has also adopted a national
program for further liberalization of its economy.
- DP - AEI Deal Gains Approvals .......... as Deutsche Post AG, the
expansion-minded German postal service & logistics group, has received
all U.S. regulatory approvals for the US$1.14B takeover of Air Express Int'l
Corp. The acquisition was approved under the Exon-Florio Statute & under
U.S. Dept. of Transportation regulations. The DOT has approved AEI's
application to register as a foreign air freight forwarder under section 721
of the Defense Production Act, commonly known as the Exon-Florio Statute.
Deutsche Post & AEI had earlier announced that the transaction had also
been cleared under the Hart-Scott-Rodino antitrust procedure. DP & AEI
are still awaiting clearance from the European Commission which is expected
by early Feb., assuming Deutsche Post AG has not acquired the European
Commission by that time. For the full story see The Cargo Letter .
- They're A Little Short After Christmas .......... as U.S. Customs
has decided to delay the release of a solicitation for bids from information
systems developers to develop its future computer system. Customs stopped
the release of this solicitation, scheduled for Jan. 5, because the agency
lacked funding for the Customs modernization efforts. In addition, port
visits for information systems developers in Laredo, Texas & Los
Angeles/Long Beach, Calif. planned for Jan. 18-21 will be rescheduled.
Customs was recently denied US$15M in emergency supplemental funding by the
Clinton Administration and Congress to run the solicitation process and
maintain its ACE prototype, National Customs Automated Prototype. The agency
continues to negotiate with congressional and administrative staffers for
the funding, and hopes to release the solicitation by the end of the month.
Customs believes that the best way to replace its aging Automated Commercial
System is by contracting with the private sector. The US$1.8B Automated
Commercial Environment is expected to take 4 to 7 years to build if funding
begins in fiscal 2001. Information regarding the bid process will be
published at Customs' website. http://www.customs.gov/contract/contract.htm
- Country of Origin Debacle ........... as on 24 Jan. the U.S.
Supreme Court rejected the appeal of a New York man whose antique Italian
gold platter was confiscated by the government over a false statement on a
customs form. The court, without comment, turned away arguments that
forfeiture was an excessive punishment & violated his due-process rights
because someone else was responsible for filling out the customs form.
Michael H. Steinhardt, an investment fund manager & antique collector,
agreed in Dec. 1991 to buy a 4th Century B.C. antique gold platter of
Sicilian origin for US$1.2M from a Swiss art dealer. A New York City art
dealer who acted as intermediary brought the platter from Switzerland to New
York. A customs broker prepared the entry form that listed the platter's
country of origin as Switzerland and its value at US$250,000. Four years
later, the Italian government sought help from the U.S. government in
recovering the platter. Italian law presumes that antique items belong to
the government unless they were privately owned before 1902. U.S. Customs
agents seized the platter from Steinhardt's home in 1995, and the government
began forfeiture proceedings. A federal judge ordered the platter forfeited
on grounds it was illegally imported because the customs form falsely said
it was from Switzerland. The judge said the platter belonged to Italy &
therefore should be considered stolen. The 2nd U.S. Circuit Court of Appeals
upheld the ruling based on the false statement. Steinhardt's lawyers said
the appeals court should have required proof that the platter would not have
been allowed into the country if the customs form had been correct. Instead,
they said, the appeals court required a lesser showing that the false
statement would tend to influence customs officials. Steinhardt's lawyers
also said forfeiting the platter was an excessive fine & violated his
due-process rights because he was an innocent party. Justice Dept. lawyers
urged the justices to reject the appeal. They said Italy was harmed "by
the loss of a valuable antique artifact" and that the purpose of the
forfeiture was to return the antique to that country. Editors Note: The
unidentified Customs Broker has been entered in the witness protection
program & was unavailable for comment.
- They May Now Come To The Mountain ........... as U.S. Customs has
relaxed its rules slightly in order to speed up port procedures, with
inspectors no longer required to board vessels when checking vessel
documentation. Instead, agents will be allowed to come ashore to present the
required documentation. Including overseas ships, U.S. Customs deals with
around 100,000 arriving vessels every year. It is expected that the
introduction of the new procedure will greatly speed up the documentation
process. Documents that crew are required to take to the Customs office upon
arrival include clearance of vessel to a foreign port, crew effects
declaration, ship stores declaration, general declaration & master's
oath of vessel in foreign trade. Customs has said that it intends to use the
money saved for enforcement purposes.
- Emery Follows DHL To Customs ......... as the customs brokerage
unit has announced that its `ImPower' program is now available in a
web-based application, similar to that launched by DHL last month (see The
Cargo Letter ). The ImPower program,
developed in-house, monitors shipments cleared by Emery's U.S.-based customs
brokerage offices, regardless of carrier or mode. Functioning as a database,
it provides detailed cargo reports as well as entry & billing
information, which is updated twice daily by Emery. The web-based version of
ImPower enables customers to access vendor & carrier compliance
information, monitor port-of-entry activity and report NAFTA activity. It
will provide the importer with a mechanism for reasonable care, responsible
supervision, vendor invoice accuracy & control of remote location
compliance from a corporate perspective. Emery has also launched a new
customs brokerage program to assist the growing number of manufacturers who
now must assume duty costs & customs compliance for Int'l shipments as
part of doing business with their customers. Emery developed it's
"Non-Resident Importer of Record Program" in response to a
significant migration from the traditional term of sale "free on
board" (FOB) to "delivery duties paid" (DDP). DDP is an
internationally recognized term of sale used to define cost responsibilities
& transfer the risk of goods shipped in Int'l trade. http://www.
- Staying With The Program? ........... as the U.S. Fish &
Wildlife service has come to an agreement with the U.S. Customs regarding
the Automated Broker Interface. Initially the Fish & Wildlife Service
complained that the ABI service, which deals in the exchange of shipment
data, was not adequate & did not supply enough information regarding
imports. This, it complained, had the direct result of hampering its efforts
to implement enforcement work. Fish & Wildlife complained that it would
no longer be using the ABI because of the inadequacy and, in addition, there
was the suggestion that the ABI was not cost effective. U.S. Customs have
considered these points & have agreed to work with the Fish &
Wildlife Service during the next 90 days in order to improve the ABI. If,
with the double effort, Fish & Wildlife is still dissatisfied with the
ABI then it will be free to chose a different method of operation. Customs
says that most problems with interagency exchanges of shipment data today
will ultimately be solved by the development of the agency's new umbrella
system, the Automated Commercial Environment.
- UPS As Forwarder-Broker? ............as "ONE-STOP"
service for shipping & brokerage between Hong Kong & the U.S. has
been launched by United Parcel Service and will be aimed at apparel,
footwear & fashion. UPS will move goods from Hong Kong to either New
York or L.A. using P&O Nedlloyd on the former route & Transpacific
Lines on the latter, with rail movement to New York. UPS is effectively
acting as a freight forwarder in this regard, handling all aspects of
transportation with the relevant customs clearance & final delivery. A
UPS spokesman said this was the company's 1st foray into the full service
customs brokerage service. The HK office of UPS will handle all arrangements
from pick up, sea transport, entry through U.S. Customs, until door
delivery. Perhaps UPS should join the NCBFAA. The support would be
- TT Club Warns Shippers To Declare Value ......... as the Through
Transport Club says that transport operators & shippers may be
insufficiently covered against the loss of high-value cargo. The warning
follows reports that the theft of computers & other high-tech
commodities has increased. "Manufacturers & shippers trying to
reduce these losses have developed a variety of initiatives, including new
contract language & audit systems that require carriers to take
additional steps to bolster cargo security," the Club said. Some
shippers who believe that standard liability limit levels in transport
operators' contracts are too low "are seeking to make cargo value
declarations on the carriage contract documents," the warning said. But
this cargo value declaration by shippers expose carriers to additional
liability risks for cargo theft, the insurance club warned. The Club urged
shippers to discuss this issue with their transport providers and, subject
to negotiation, be prepared to pay higher transport rates for declared value
cargo. While the warning is quite valid, "declared value" will not
protect shippers in all respects. The better course is for shippers to
arrange quality cargo insurance from their freight forwarder or logistics
provider. It should also be noted that so called "special
contracts" between shippers & forwarders to increase liability
limits can, in some circumstance, work to voi d the forwarder or carrier
liability insurance coverages. Please check with your transport legal
advisor or insurance broker before commencing any new liability
arrangements. We stress the importance of this. Do not arrange your new
customer service program alone, because when the 1st problems arise you will
have quite a bit of company from the customer's law firm stopping by.
- Panalpina Calling ......... as the Swiss forwarding & logistics
group, is introducing shipment tracking & tracing of shipments by mobile
phone. The new functionality uses wireless application protocol, which
enables customers to dial into the Internet by telephone & access
Panalpina's consignment tracking system PanTrace. The only prerequisite is
that they use a WAP-compliant mobile phone. Panalpina said the technology is
based on WAP standard 1.1. There is no word on reports that cargo tracking
will now add to the list of modern day restaurant noise annoyances. Further
to it's "E" interests, Panalpina has acquired Avalog AG, a Swiss
logistics information technology firm, from SAirGroup, the parent company of
airline Swissair. Based in Glattbrugg, near Zurich, Avalog supplies
logistics consulting & management services. Its activities include
developing information technology products. The company's role within the
group will be to design and implement new logistics & supply chain
- Pacer Int'l Gets Conex ........... as the North America freight
transportation & logistics provider has expanded its transloading,
local-trucking, warehousing and its intermodal marketing activities, through
a merger with Los Angeles based Conex Global Logistics Services, Inc.
Established in 1977, Conex becomes the 8th logistics firm to come into the
Pacer group in the last 24 months. Its operations are centered in L.A., San
Diego, & Calexico, Calif.; Seattle & Atlanta. It handles some
225,000 loads annually.
- Schenker Gets Chemical ........ as Germany's Stinnes AG, the parent
company of Schenker, has acquired the chemical distribution & logistics
firm Neuber GmbH. Stinnes said that the acquisition of Neuber will
substantially expand its network into the Eastern European market for
- Proving It's No Fly By Nite ........ as U.S. trucker Overnite
Transportation Co. filed suit Tues. in U.S. District Court in Jackson, TN.,
naming Int'l Brotherhood of Teamster President James P. Hoffa & other
executives of the union as defendants. Overnite alleges a "pattern of
racketeering activities" that includes 57 acts of attempted murder
& 131 acts of extortion, as well as numerous violations of Tennessee
law, with intent to "put Overnite out of business if Overnite and its
employees do not agree to collective bargaining representation" by the
Teamsters. The Teamsters have been striking against Overnite Transportation,
the nation's largest non-union LTLcarrier, for about 3 months. The suit
seeks damages in excess of US$5.2M for security expenses, damage to Overnite
property, damage to the property of Overnite employees for which Overnite
has provided compensation & costs of replacing workers who missed work
due to lawlessness, Overnite said. Teamsters side told: http://www.overnite.org/
- USFreightways Corp. Gets Transport ........ as it has agreed to buy
Transport Corp. of America Inc.for about US$149M in stock. Transport Corp.
will become a subsidiary of USFreightways, which owns 5 other regional
- DOT Takes Cyber Cash ........ as U.S. Dept. of Transportation staff
has developed what the DOT calls the 1st federal government online payment
site. The web site, called "Do It Yourself" allows DOT customers
to fill out forms online and pay immediately using a credit card. The web
site eliminates errors due to multiple data handling, speeds payment
processing & product or service delivery and avoids forms & checks
from being misplaced or stolen. http://div.dot.gov
- HKG Quota Warning ......... as Hong Kong Customs & Excise Dept.
issued a written warning to garment manufacturers this month that making
false a statement in an application for a Textiles Export License &
Certificate of Hong Kong Origin is a serious offense. Under the Import &
Export Ordinance, the maximum penalty for the offense is a fine of
HK$500,000 & imprisonment for 2 years. The warning was given after a
local factory & its subcontractor were allegedly found in breach of the
ordinance when intending to export about US$1.77M worth of garments to
Belgium under the Hong Kong textiles quota. It was found that the garments
were actually made in the mainland. The Dept. takes a serious view of
textiles' origin fraud cases & will act vigorously to combat illicit
- Bureau Veritas Buys U.S. .......... as it has agreed to the
acquisition of Unicon Int'l & Neptunus, the San Francisco headquartered
groups specializing in intramural equipment and cargo management services
for the transport & logistics industries. The acquisition will enable
Bureau Veritas, a leader in the certification & statutory inspection of
containers & intramural equipment, to broaden its client base. Unicon
was founded in 1981 and has performed over 12,000,000 surveys during this
period. Covering 150 ports in 45 countries. Unicon's product lines include
the full range of intramural equipment, life cycle repair management
activities as well as supply chain inspection service for dry &
- New Circle Chiefs ........... as Circle Int'l has announced several
executive management promotions. Randy T. Clark has been named Exec. V.P.,
operations planning & logistics. In his new position, he assumes
worldwide responsibility for operations planning, new business integration,
global pricing & product development and Circle's Logistics & Supply
Chain Management group. He replaces Kim Wertheimer, who left to become Exec.
V.P. of North American Int'l business development for Eagle USA Airfreight.
Paul H. Graham replaces Clark as Exec. V.P. & COO for North America.
Graham, a 20-year veteran, has served as president & COO of Circle's
Asia Pacific region since September 1996. Clark & Graham are based at
Circle's SFO headquarters.
- Hellmann Worldwide Promotes ........ as Jim Parker, General Manager
of Hellmann�s Tampa facility has been appointed Regional Manager,
Southeast, Hellmann USA. Parker came to Hellmann as terminal manager in 1988
from Steevens Diz Int'l when Hellmann purchased that company.
- Nematodes Get Stay of Execution ........... as China has introduced
a 60 day grace period before strict enforcement of new quarantine measures
imposed on imported Japanese & U.S. pallets made from fiberboard,
plywood & woodboard. After authorities have complained that vermin &
pests were entering the country through the softwood packaging used for
imported cargo, it was decided that starting Jan. 1 such softwood packaging
from Japan and the U.S. be heated to 56 degrees centigrade for half an hour.
Such treatment would, the authorities claim, kill the pinewood nematodes
sometimes found in pallets from both the U.S. & Japan. However the
enforcement of an import ban on items not so treated will not be strictly
applied until the beginning of March, even to those cargoes without required
documentation detailing the pallets' heat treatment. Exporters from the U.S.
& Japan protested against the implementation of such a ban and the speed
at which it was introduced, 2 months, through political bodies &
demanded it be dropped. In response the Chinese authorities sought Japanese
governmental recognition of pinewood nematode worms as vermin & softened
their stance somewhat. There was no response from the Nematoades. It is
thought that infested pallets will be discarded in China at the importer's
expense. Hong Kong is exempt from the ban, with hardwood pallets continuing
to be disinfected only.
- No Forwarders For These "Importers" .......... as
smuggling beer into Britain across the Channel is becoming one on the
fastest growing, retailing sectors this year, albeit part of the black
economy, with business up nearly 12%, according to a recent report. The
survey by the Brewers & Licensed Retailers Assn. (BLRA) estimated that
more than 100,000 heavily loaded vans carried largely illegal beer across
the Channel from Calais in northern France during 1999.
- Next Year They'll Add A Fourth Wheel ......... as soon Dutch
postmen will trade in their bikes for a newly developed tricycle. PTT Post
has purchased a few hundred of these, and expects there will be Int'l
interest in this conveyance for distribution in urban areas. With this new
trike the postman can take along more mail & parcels, while it also
saves energy. The tricycle is a Dutch design. Its appearance is striking,
but it is also said well thought out ergonomically.
- Be Sure To Properly Mark You Contraband ........... as an elastic
hair band used to mark a case at Cairo Int'l Airport aroused the suspicion
of customs officials & led to the discovery of smuggled Viagra pills
worth US$145,350 on Jan 13. An Egyptian passenger made a deal with a tourist
company representative that he would leave the case with the group's bags
because he believed customs were more lenient in their dealings with
tourists. The tourist representative agreed to deliver the case later. When
customs officials picked out the case with the hair band and asked for the
owner, no one claimed it. They opened it and discovered 10,000 Viagra
tablets, which are used to enhance sexual potency. The tourist
representative was detained for questioning & confessed to the deal. The
hair band has not been claimed.
- AMR Corp., parent of American Airlines. DOWN with 4th quarter net
earnings of US$105M, or US$0.69 per common share diluted. This compares to
net earnings of US$167M, or US$1.00 per common share diluted in the same
period in 1998.
- American Freightways. UP with operating revenue for the quarter
ended Dec. 31, 1999, to US$306M, up 20.1%.
- Burlington Northern Santa Fe Corp. UP with record 4th quarter 1999
earnings of US$0.69 per share on a diluted basis, a 10% increase. Net income
increased US$19M to US$315M.
- Continental Airlines. UP with 4th quarter net income of US$33M
($0.48 basic & $0.47 diluted earnings per share), exclusive of
previously announced gains & charges. This exceeds First Call's
consensus estimate of $0.39 diluted earnings per share. The company reported
its 5th straight year of profits, with annual net income of US$359M. The
company ended the year with its stock having appreciated 32.5%, highest of
all the major U.S. airlines.
- Eagle USA Airfreight. UP with record revenues & earnings for
the 1st quarter ended Dec. 31, 1999. Revenues for the 1st quarter increased
29% to US$187.4M. Net income for the quarter totaled US$10.0M, a 29%
increase. Diluted earnings per share for the 1st quarter increased 22% to
- Fritz Cos. Inc. UP as net income for the quarter ending Nov. 30.
was US$9.1M, up 6.7%. Net revenues (revenue less direct transport costs)
improved 4.6% to US$160.7M, while revenues jumped 11.7% to $426.5M.
Operating expenses rose 4.8% to US$145.3M, due to a 6.9% increase in labor
expenses and a general & admin expense increase of 1.4%. In related
news, Richard Skidmore has just been named as V.P. of Human Resources,
having held that position previously at First Nationwide Bank (now
California Federal), USL Capital, & Associates Corp.
- Malaysian Airline System Bhd. Up as it appears to have weathered
its most turbulent spell but the national carrier is still not in the clear.
MAS has recovered smartly from deep losses last year, posting a net profit
of US$72.4M in the 6 months to Sept. 30, against a net loss of about US$118M
in the same period in 1998.
- Northwest Airlines. UP with 4th quarter operating profit of US$94M.
Revenues for the fourth quarter increased to US$2.555B, an increase of 15.5%
over 1998. Quarterly operating expenses were US$2.461B, an increase of 2.4%
from 4th quarter of 1998. Northwest experienced a 25% increase in fuel price
year-over-year; absent the increase operating expenses declined 0.3%. For
the full year, the Company reported an operating profit of USD 714 million.
Revenues for the full year 1999 increased 13.6% to US$10.276B. Operating
expenses for 1999 increased 3.5% to US$9.562B.
- Northwest Cargo. UP as revenue increased 18.2% to US$221M in the
last quarter & grew 14.4% to $725 million for the year. Cargo ton miles
(cargo weight carried multiplied by the distance it traveled) increased
17.9% to 679 million CTMs in the 4th quarter, spurred by a strong peak
shipping season. For the year, CTMs jumped 19.5% to 2.3 billion, reflecting
economic recovery in Asia.
- Southwest Airlines. UP with net income for the year ended Dec. 31,
1999 of US$474.4M, an increase of 9.4%.
- USFreightways Corp. UP with record net income for the 13 weeks
ended Dec. 31, 1999 of US$30.7M, equivalent to US$1.11 per share (diluted),
a 52% increase over same period 1998.
- Forward Air Splits ......... as its Board of Directors authorized
the splitting of Forward Air's common stock on a 3 for 2 basis for
shareholders of record on Jan. 21, 2000. (Nasdaq/NM:FWRD).
- MAS Jump ........ as the price of shares in Malaysian Airline
System (MAS) rose by well over 13% on 11 Jan. following market rumors that
KLM is to take a stake in the airline.
- Volume Up & Rising ......... as air cargo traffic increased by
8.5% last Sept. according to statistics published by Geneva-based Airports
Council Int'l. World airport cargo traffic was 5.08 million tons, according
to the survey. Asia-Pacific airports reported a cargo traffic increase of
13%, to 1.26 million metric tons in Sept. compared to Sept. 1998. Mideast
airports reported a 15% jump in cargo volumes, to 200,934 tons. The Mideast
was the region with the fastest rate of cargo growth in Sept. North American
airports handled 2.43 million tons, an increase of 6.5%. European airports
reported a volume of 1 million tons, up 9%. According to the latest survey
of major airlines, airports & civil aviation authorities by the Int'l
Air Transport Assn. air freight traffic volumes will rise by an average of
5.5% a year during 1999-2003. The 5.5% annual growth rate predicted by IATA
is 0.2% points higher than the average growth rate it had estimated in its
1998-2002 freight forecast. Following recovery in the Asian markets, freight
traffic growth is estimated to have exceeded 6% in 1999, IATA said.
- Parcel Rates Will Rise ........... as the U.S. Postal Service is
getting ready to kick off the complex process of raising rates, a step that
could mean higher stamp prices early next year. Major mailers have been on
edge in recent months, anticipating the action many expect to be announced
at the monthly meeting of the Postal Service's board of governors. Officials
of the Mailers Council & Direct Marketing Assn. also said they expected
action soon. Postal officials were not discussing how much of an increase
would be sought. Two of the post office's main competitors - FedEx & UPS
- recently announced rate increases to take effect in Feb., citing rising
- Bye Bye Brussels? ........... as DHL is breathing a sigh of relief
as a proposal by the Belgian transport minister to ban night flights into
Brussels Int'l Airport has been scrapped. The Belgian government had planned
to slowly introduce a total ban on night flights arriving or departing from
the airport. Starting next year, wide-body aircraft were not to be given
landing or take-off permission from between 2300 hours & 0700 hours. In
2003, a total ban on all aircraft from 0100 hours to 0500 hours would have
come. Cargo carriers became dissatisfied with the move which came about due
to increasing pressure from groups concerned with noise pollution from late
night flights. Cargo carriers often operate during these late hours after
passenger flights have stopped. Worse for DHL was the fact that Brussels
serves as its European hub. DHL had feared that as a direct result of these
changes it might have to move to a different European base, thereby risking
the loss of about 6,000 jobs. Thousands of DHL employees demonstrated in
favor of the official result last week. Bravo!
- No More Visits After The Crash .......... as Korean Air will not
resume freighter service at Stansted airport in the U.K. until at least
April. As reported here last month, a KAL B747-200F freighter crashed last
month just after take-off from Stansted, killing 4 crew members. The plane
was en route to Seoul via Milan, Italy. KAL will continue freighter service
to Milan from Seoul. The Korean government has banned the airline from
adding any new Int'l routes until May 2001. In an effort to solve it's
problems, KAL has named David Greenberg as Exec. V.P. & chief operating
officer for Flight Operations & Safety & Security divisions. He has
more than 35 years of experience in aviation & served with Delta Air
Lines for 28 years, last as V.P. of Flight Operations. Greenberg, a former
U.S. Air Force pilot, will focus on simplifying KAL's fleet to include only
4 aircraft types: Boeing 747-400s, 777s, & 737s & Airbus A330s.
- FDX Looks Inward ........... as the parent company of Federal
Express & RPS, says it will revamp its sales operations to spur domestic
package growth. Domestic volume growth continued to lag at FDX's flagship
FedEx unit in the 2nd quarter, raising questions that go to the core of the
express company's operations. While domestic deliveries account for almost
90% of FedEx's business, average daily domestic package volume has edged up
just 2.8% to 2.9 million packages this year. FDX says it needs that domestic
growth rate to be in the "six to eight range." Analysts suspect
e-mail and faxes are eating away at FedEx's overnight document business, but
FedEx says its letter business is still growing and blamed the slow domestic
growth on a yield management program that has FedEx turning away
unprofitable business and on a poor sales effort targeting the package
business of smaller shippers. FDX plans to reorganize its sales force &
focus on winning more business from small- to medium-sized shippers. The
company will cut capital expenditures by US$200M and try to save US$75M by
implementing a hiring freeze. See story below.
- FedEx To Become FedEx ......... as the Memphis based FDX parent
will now be known as FedEx Corp. as a result of the name change to promote
the brand. The name change will also be reflected in the names of its
subsidiaries. FedEx's business service, for example, will become FedEx
Express. RPS will be renamed FedEx Ground. FedEx Home Delivery, the new
residential delivery service, will be provided through the FedEx Ground
network. Roberts Express, the expedited, time-critical delivery sector, will
be renamed FedEx Custom Critical. FDX Logistics will be renamed FedEx Global
Logistics. Temporary automobile storage areas will be renamed "FedEx
- Air Europa Joins The Team ........... as the a privately owned
Spanish airline has signed an agreement with KLM & Alitalia to join the
Dutch & Italian carriers' global carrier alliance. The 3 carriers expect
to finalize a deal by April. Air Europa will enhance KLM's & Alitalia's
joint network in Europe, adding Madrid to hubs in Amsterdam, Milan &
Rome. Air Europa operates 46 aircraft in Spain, and internationally between
the Iberian Peninsula & Europe, North American & the Caribbean. KLM
& Alitalia fully integrated their European networks, including cargo, in
Nov. They have joined with Northwest & Continental Airlines in the U.S.
- Singapore Airlines Down Under? .......... as it may team up with
Virgin Atlantic to start a domestic airline service in Australia, analysts
report. The Singapore carrier's attempt to buy a 50% stake in Australia's
Ansett Airlines last June fell through after Air New Zealand said it would
use its preemptive rights to stop News Corp.'s proposed sellout to Singapore
- Continental Unto Itself? ........ as it has had had preliminary
talks with Northwest Airlines about buying Northwest's controlling equity
stake in Continental. Northwest purchased a 14% stake in Continental in 1998
from Air Partners LP in a deal valued at US$520M. This gave Northwest 51%
control of Continental, but Northwest agreed to limitations on its voting
authority in order to preserve Continental's independence. Nevertheless the
U.S. Justice Dept. started a lawsuit which is pending.
- Continental & Northwest Win Battle of The Bands ........ as
they beat United, American & Delta in a survey of Forrester Research on
the overall major airline Web sites. Forrester gave points for customer
service, booking features, fare finders & a lot of other services. Not
one of the U.S. lines reached more than 60 point on a scale of 100:
- Continental Airlines 57.82
- Northwest Airlines 55.7
- US Airways 54.3
- United Airlines 54.2
- American Airlines 51.8
- Alaska Airlines 47.9
- Southwest Airlines 45.8
- Delta Air Lines 44.6
- America West 39.6
- United Fights Back ....... as it has introduced a free new web site
based flight paging service that will proactively inform customers of flight
delays, cancellations & gate information via e-mail. Messages can be
automatically sent to a customer's personal computer, text-enabled cellular
phone or alphanumeric pager, enabling travelers with wireless capabilities
to stay abreast of schedule changes. Individual users can tailor the service
to suit their preferences by choosing different options on the form, such as
whether to be alerted when a flight is delayed more than 15, 30, 45 or 60
minutes. Gate information can be provided within 1 to 4 hours of the
scheduled arrival or departure time. Take that Continental! http://www.ual.com
- UPS Online Record .......... as it recorded just under 3.3 million
online tracking requests on Tues., Dec. 21 the highest one-day total in the
- For Sale: Areolineas Argentinas ........... as the Argentinean flag
carrier, is currently facing financial problems & is being bailed out by
the Spanish (not Argentine) government. Until this month, American Airlines
had an 8.5% stake in Aerolineas and was managing it. But after recording a
US$125M loss for the year 1999, the airline decided to sell its share. So
far, it has been difficult to find investors, but both Continental &
LanChile have shown an interest in acquiring stakes. Aerolineas has debts of
US$500M & US$300M in liabilities.
- New Asia Cargo Player....... as there will be 4 Asian destinations
earmarked for service by "Thai Air Cargo", a new Thai airfreight
service. Deploying Airbus A300-B4F freighters, the airline will initially
operate services to Hong Kong, Taiwan, China & Bangladesh, planned to
start in Sept. 2000. Good Luck!
- From The Wood To The Hood ........... as the U.S. arm of DHL
Worldwide Express will move its U.S. corporate headquarters to the heart of
San Francisco's financial district at the end of this year. Located downtown
at 50 California Street, the new office will make DHL one of the largest
corporations headquartered in the City of San Francisco. It will begin its
move in December 2000, when the 5 year lease expires on its current location
in Redwood City.
- 737-700C Nears Birth ........ as Boeing has now joined the wings to
the fuselage of the company's 1st B-737-700C (convertible) aircraft at its
Renton, Washington facility. The U.S. Navy is the kickoff customer for this
newest member of the "Next-Generation 737" family, and is
purchasing the aircraft to begin replacing its fleet of C-9 Airlifters. The
Navy version, designated C-40A, will be certified to operate in 3
configurations: an all-passenger (121) configuration; an all-cargo
configuration of up to 8 pallet positions; or a combination, or `combi,'
configuration that will accommodate up to 3 cargo pallet positions & 70
- New Ukraine Freighter .......... as it's Antonov airplane design
bureau says a civilian version of its Antonov-70 military transport aircraft
will be produced in 2001, allowing it to replace obsolete Soviet-made cargo
planes (sorry, aren't most of them?). The An-70T, as well as the 1st
generation An-70 designed more than 5 years ago, will carry 35 tons of cargo
for a distance of 3,800 km (2,400 miles) at a cruising speed of 750 km (470
miles) per hour. Technical changes made in the civilian version would give
the An-70T a maximum cargo capacity of 47 tons. The new aircraft would be
operated by 3 crew members compared with the An-70's 6 member crew. The
An-70T could receive Int'l flight certification by 2002. Officials set
demand for various modifications of the Antonov plane, including the
military An-70 and An-7X as well as the civilian An-70T, at about 1,500
units worldwide including about 200 to be sold in Russia and Ukraine in the
next 10-15 years. In 1999 eight European countries announced an Int'l tender
to choose a new mil itary cargo aircraft for their armed forces. The new
plane is intended by it's makers to replace older U.S.-made C-130 Hercules
cargo aircraft after 2002. Russia financed 75% of the military version with
Ukraine providing the remainder. The cost is estimated at around US$40M.
- New BAX Global Customs Chief .......... as the California based
logistics company has appointed Richard English, the former V.P. of import
services for Air Express Int'l, to be V.P. of import Bax's U.S. Customs
- Aero Zambia Can Find You A Seat ............. as the grounded
regional airline has revealed that it had plied the skies on the strength of
a license issued back in 1998, which was not renewed last year because of
hitches at a government department. The government had now refused to renew
the 1998 license, effectively preventing Aero Zambia from doing business in
2000. Transport Minister Nkandu Luo told Aero Zambia she would not grant
them a license to deliver an air service, on the grounds of safety. A judge
has allowed Aero Zambia to fly temporarily while it seeks a court order
reversing the government's decision. But its flights have been repeatedly
canceled or rescheduled because of technical concerns, passengers
complained. Aero Zambia flies between Lusaka & the Zimbabwean capital
Harare 4 times a week, Johannesburg 6 times a week, and the Kenyan capital
Nairobi once a week. It operates two B737-100s. Each aircraft's normal
capacity is 108 passengers. However, the operational capacity is just 65
passengers because of cargo obligations. Troubles at the airline are said to
have severely lowered its passenger load. We can't imagine why.
- Booby Prize .......as the FAA reports that America's top honor for
the most delayed flight of 1999 goes to U.S. Air's flight 2762 from
Washington D.C. to Atlanta. Over the year this flight was delayed a total of
over 160 hours, just short of a full week. Try the train.
- Fuel Bumps Rates Up ........ as Cathay Pacific Airways Ltd. will impose a
10 euro per kg cargo fuel surcharge across Europe, effective next month.
Most major cargo airlines, including FedEx, Lufthansa Cargo, Swisscargo,
Cargolux, Airborne & Korean Air, are implementing fuel surcharges in
Feb. U.S. carriers American, Continental, Northwest, United, UPS & TWA
are already on board the raise. Expect this situation to worsen.
- Freighters As Combatants ........... as the world's 1st Airborne
Laser (ABL) flying platform for the U.S. Air Force will be a B747-400F
freighter. The initial test vehicle flew into Boeing facilities in Wichita,
Kn. on Jan. 22 & will immediately begin 18 months of major modification
work by Team ABL on its next step toward becoming the world's 1st flying
missile defense system. The most visible difference will be the installation
of a turret in the aircraft nose, from which a beam of laser light will
emanate to destroy Scud-like missiles hundreds of miles away. Additionally,
the aircraft will be modified to accept a multi-megawatt-class chemical
laser, specialized optics, and computer hardware & software that will
allow the aircraft to spot a theater ballistic missile in its boost phase
shortly after being launched, lock onto & destroy it. The YAL-1A Attack
Laser plane is the 1st to be acquired for Air Force use under the military's
new commercial "off-the-shelf" philosophy. Labeled Aircraft No.
00-0001, the ABL platform also is the 1st U.S. Air Force aircraft of the new
century. The plane also is the 3rd ever Boeing 747-400 built using a new
fuselage assembly process that significantly reduces rejection tags &
cycle time. Go Boeing!
- WHO Med Loss ......... as the cargo division of the SAir Group,
Swisscargo, said on 21 Jan. that it accepts liability for the loss of a
batch of scientific samples belonging to a research project sponsored by the
World Health Organization. The shipment, which consisted of 5,000 frozen
blood & urine samples and weighed 23 kgs, left Glasgow by truck on Nov.
18 for Edinburgh en route to Japan. "We are pretty confident it reached
Edinburgh," David Harman Swisscargo's UK & Ireland manager told
Reuters. The carrier said it was technically liable for only about US$24 per
kg lost, but was seeking to come to a mutually satisfactory solution as a
goodwill gesture. Harman said he was unable to confirm reports that the UK
group conducting the research, Moneo Alimentaris Sanae, had submitted a
claim for US$96.000. We'll see.
- IATA Financial Summit ......... as the annual event will be held
4-6 April 2000, at the New York Marriott World Trade Center Hotel, in
downtown Manhattan. Now in its 11th year, this unique event brings together
leading experts & decision-makers from the airline & finance
communities, to discuss key financial issues facing the aviation industry.
Geared heavily towards debate & open discussion, the summit will focus
on airline relations with the investment community & latest developments
in the finance markets. Case studies on Jetblue Airways, Emirates & the
SAir Group will also be featured. For more information, contact Elaine
- LAX Honors The Teapot ......... as through Feb. 28, 2000, "The
Art of the Teapot" will be on display in a glass case on the upper
level of Terminal One. This exhibit features artwork from 28 artists, in the
latest creative interpretations of a teapot. "A Century of Toy
Trains" is on display in the lower level of the Tom Bradley Int'l
Terminal, south of the traveler information desk. From early cast-iron pull
toys to sophisticated electric scale models, the exhibit features an
internationally diverse collection & is capturing the attention of
travelers from around the world. Trains will be on display through March 1,
2000. In the lower level of the Tom Bradley Terminal, inside the U.S.
Customs area is a chronicle of the history of the old "Wild West
Show." On display through Feb. 2000, "Wild West Show"
features artifacts, posters, photos and traditional Western & Native
American clothing from the Buffalo Bill Cody & the Wild West Shows
collection. This display also features a life-size adult bison. The next
time you visit LAX, check out the latest art exhibits in the glass cases at
Terminal One & on the lower levels of the Tom Bradley International
Terminal. Since 1989, LAX has displayed exhibits for periods of up to 4
months. For more information on artwork exhibits at LAX, contact Therese
Sweeney at 310/646-7770.
- Flying Blind ........... as a dead drunk Moroccan commercial pilot
at Amsterdam Airport Schiphol was prevented, just in the nick of time, from
flying to Tangier with 125 passengers. The Boeing 737 of Royal Air Maroc was
grounded together with the plane's occupants and was only able to take off
the next day with a different crew. In the blood of the pilot an alcohol
percentage of 2.2 was found. By our local LAPD standards, this level
requires a call to the Coroner or funeral home. The Assn. of Dutch
Commercial Pilots (VNV) typifies this incident as 'a shocking exception.'
The airport promises that more rigid alcohol checks will be introduced. We
suggest perhaps some test to see if pilots are able to walk upright.
- Volumes. >>> Hong Kong Int'l Airport continues up as
198,000 tons of air cargo were handled during Dec. 1999, a 33.7% increase
over Dec. 1998. In the last month of 1998, 68,496 tons of cargo were
unloaded while 79,644 tons were loaded. In December 1998, 1,118 aircraft
carrying cargo landed or took off compared with Dec. 1999 when 1,495 air
cargo movements were recorded, a 33.7% increase. >>> Kuwait Int'l
Airport handled 12.7% less cargo in 1999 compared to 1998. The air cargo
sector at the airport is still being affected by the halt in Kuwait Air
cargo flights & its transport of cargo on passenger flights due to the
relative economic recession in the region. During 1999, Kuwait's only Int'l
airport handled 115,986 tons of cargo -- 81,181 tons incoming & 34,805
tons outgoing -- compared with 132,810 tons in 1998. >>> Macau
Int'l Airport was up sharply to 6,343 tons, growing 11% compared with last
Dec., although year to date cargo volume is down 18% at 53,118 tons,
compared to 1998, when there was considerable spillover cargo as a result of
post-opening operating constraints at the new Hong Kong airport.
>>> Paris-Orly & Charles-de-Gaulle airports last year saw
freight & postal traffic up 5.8% to 1.36 million tons.
Written from wire stories, the Associated
Press, Reuters, Hong Kong Shipping News Lloyds & other world sources.
- The Traffic In Human Cargo .......... as this month 136 Chinese on
8 ships - including 3 dead & 15 severely weakened people in a container
on NYK Line's M/V Cape May from Hong Kong - have been seized at ports in
California, Washington State & Vancouver. On Jan. 3, 25 stowaways were
found aboard M/V California Jupiter, on a tip, when it arrived in Vancouver.
The trend has sparked discussion about what can be done to curb the
smuggling, from fining or seizing ships to installing container-scanning
equipment at ports & strengthening efforts to detect stowaways before
ships leave Asian ports. Chinese gangs are believed to be responsible for
arranging to get migrants aboard ships in exchange for exorbitant fees. On
Jan. 14 two men, known as "snakeheads," were indicted for
allegedly attempting to smuggle 12 Chinese nationals into the U.S. aboard a
cargo ship traveling from Hong Kong. A federal grand jury returned a 4 count
indictment against Yu Zheng & Sheng Ding, both illegal aliens from
China. Each faces up to 40 years in prison. Zheng & Ding were arrested
Jan. 2 as they waited in a van parked at the Port of Seattle. The stowaways
were found inside a filthy cargo container when it was unloaded from M/V
OOCL Faith. Zheng & Ding charged up to US$60,000 for each person
smuggled. On 22 Jan. Hong Kong's port authorities announced plans to use
X-ray machines to scan containers in a bid to cut down on the human
- Brazilian Tragedy ........ as authorities found the bodies of 10
stowaways early this month in the hold of the Liberian-flag cargo ship M/V
Karonga, which was carrying bags of cocoa beans from the Ivory Coast. The
victims died from gas used to fumigate the hold & preserve the beans
from pests. Horrible.
- NCBFAA Continues The Antitrust Fight ............ as The National
Customs Brokers & Forwarders Assn. of America will intensify its battle
to end ocean carrier antitrust immunity in the U.S. Ocean Shipping Reform
Act. The initial intent of maintaining carrier antitrust immunity, the
ability for carriers to act collectively, was to protect what's left of the
U.S.-flag carriers. But forwarders & NVOCCs say antitrust immunity is no
longer needed, because most of the U.S.-flag carriers have been sold to
foreign entities. The industry also says that carriers are abusing their
collective powers by discriminating against small shippers, forwarders &
NVOs. "Over the early months of OSRA, it is clear that our intermediary
community is greatly disadvantaged by the preservation of this privilege --
one that is hardly consistent with an open and fair marketplace where we can
all compete," said Peter H. Powell Sr., president of the NCBFAA in a
letter to its 600 member firms. NCBFAA supports a recent bill (H.R. 3138)
initiated by Henry Hyde, R-Ill., chairman of the House Judiciary Committee,
to abolish antitrust immunity in OSRA. "It would revoke antitrust
immunity from the carriers, making them vulnerable to Justice Department
enforcement for collusive behavior & discriminatory treatment of NVOs
and forwarders," Powell said. Part of the NCBFAA's battle plan is to
begin a letter-writing campaign to about 20 House members with committee
assignments that may influence the Hyde bill. We support NCBFAA.
- U.S. Says No To China Rate Approval ........... as the U.S.
government has urged China to drop proposed regulations that would give the
Chinese government authority to approve Int'l ocean shipping rates & to
require that service contracts be made public. Maritime administrator Clyde
Hart, in a letter to China's vice minister of communications Hong Shanxiang,
said the proposed regulations "represent an unprecedented attempt"
by the Chinese government "to control the practices & activities of
commercial parties that collectively make up the Int'l shipping
market." Hart also reminded China that opposition to its proposed
shipping regulations is widespread, including the governments of the EU
& Japan. The regulations, which would require tariff filing, rate
approvals & public service contracts, would clash with China's major
trading nations, which have moved from a regulated environment to a free
market system, Hart said. "These regulations would restrict market
access & competition." New regulations "should state
unambiguously that the government of China will not interfere in the market
for shipping services between carriers & shippers, including in
particular the negotiation of freight rates and all commercial terms &
conditions," Hart said. "The regulations should also authorize the
practice of private service contracting that is widely used in Europe, the
Americas and in Asia as well."
- Sorry .......... as shippers will not be entitled to receive
interest on the Harbor Maintenance Tax refunds they receive as a result of a
U.S. Supreme Court ruling that the tax -- which had been in effect for
several years -- is unconstitutional as applied to exports. The new ruling,
handed down by the U.S. Federal Circuit Court of Appeals, overturns an
earlier decision by the Court of Int'l Trade, holding that shippers were
entitled to refunds & interest. In related news, taxpayers are reminded
to file their returns promptly this year, or interest will be due.
- End of An Era ........... as enactment of the U.S. Ocean Shipping
Reform Act (OSRA) has seen another conference finding itself without a
purpose. This time it is the shipping lines of the Trans-Atlantic Conference
Agreement (TACA) who have closed their New York secretariat office. This is
the second reduction in staff levels seen at TACA since OSRA virtually
eliminated the role of conferences in managing service contracts between
certain carriers & shippers. The conference secretariat will continue to
handle agreement services for the conference & also maintain the tariff.
The staffing levels will be reduced to a total of 4 based in Crawley, just
outside London, next June. This is down from a combined workforce of 30 in
the U.S. & Europe in 1988 & 6 in 1999. Meanwhile, members of the
Japan-U.S. Eastbound Freight Conference have agreed to extend the current
suspension period until at least July 31, next year. Members include P&O
Nedlloyd, Hapag-Lloyd, NYK, Wallenius-Wilhelmsen, OOCL, APL, K Line, Maersk
Sea-Land & Mitsui OSK.
- There Will Be No Visit To Beijing .......... as the Federal
Maritime Commission's Bureau of Enforcement has argued against dismissing a
complaint by NVOCC Cargo One against China's state-owned COSCO Container
Lines. Cargo One charges that COSCO refused repeated requests to book
agreed-upon volumes of cargo under a service contract covering freight
moving from Hong Kong to U.S. West Coast ports. The NVO said it succeeded in
moving only 6.5 TEUs under the 250-TEU contract. Cargo One said that COSCO
claimed the reason it was unable to book the NVO's cargo because it had to
allocate space to other larger shippers. The NVO also claimed that COSCO
attempted to offer Cargo One space at tariff rates during the contract
period. The bureau of enforcement also said that the commission's policy
considerations lean toward the FMC exercising jurisdiction over the
complaint, despite COSCO's argument that the appropriate venue would be
Beijing, under terms of the contract.
- New Anti-Pirate Measures ........... as authorities at the Sri
Lankan port of Colombo have started posting armed soldiers at night on
selected cargo ships. The new service, which is free of charge to
shipowners, is part of the Sri Lankan government's effort to reduce pirate
attacks in its ports. The government reports that it's new anti-piracy
procedures have already made a "noticeable impact." For many years
industry groups have been pressing Sri Lanka to improve its port security.
"This measure should certainly help to achieve this goal & should
set an example for port authorities facing similar problems," said
Thomas Timlen of Baltic & Int'l Maritime Council. Visit our new Vessel
Casualties & Pirate Activity Database
- Venezuela Recovers .......... as it's main port of La Guaira needs
extensive repairs following devastating flooding which washed 500,000 cubic
meters of mud into the harbor basin as well as demolishing the offices of
200 customs officials & killing customs workers. Despite fears that the
port could be shut entirely, most terminals are able to operate at least
partly & repair work is expected to take 45 days and cost US$1.85M. The
floods wreaked havoc with the port, destroying buildings & installations
as well pouring silt into the harbor.
- Carriers Join Bolero .......... as APL, Evergreen, "K"
Line, Maersk Sea-Land, Mitsui O.S.K. & NYK plan to offer paperless
trading in its transactions worldwide through the "bolero.net"
secure Internet communications system. Evergreen took part in the bolero.net
test program last year. Evergreen's vice chairman George Hsu said the system
will afford his company a competitive advantage. The system will improve
cash management, supply chain management and ownership transactions, as well
as provide a platform on which to build further value-added services, he
said Bolero is an open system, has a legal framework, has security of
transactions & has interoperability. Learn more about Project Bolero at
our "Legal Research Center." http://www.cargolaw.com/d.legal_files.html
- Destroy Those Old COSCO B/Ls! ............ as the carrier is to set
free its subsidiary entities, which will begin to trade under their own
names on Feb. 15. The massive Chinese State run enterprise will allow
subsidiaries to trade under their own names and as a result agents around
the world are being advised to sign no old style bills of lading after the
transfer date. The company has given assurances that all bills of lading
bearing the "China Ocean Shipping Company" or "China Ocean
Shipping (Group) Company" will be sealed or destroyed by that date.
COSCO Container Lines Co. has already been using its own bill of lading
since 1998 & other subsidiaries are now poised to step out on their own.
- The Chinese Are Coming, The Chinese Are Coming! ......... as two
editorials from World Net Daily are posted on the subject of U.S. Panama
Canal Transfer last month. Did President Clinton admit that the Chinese will
run the Panama Canal? We don't think so. http://www.worldnetdaily.com/bluesky_btl/19991201_xcbtl_clintons_p.shtml
- Hyundai Pays Up ......... as it says it had paid US$6M to North
Korea to compensate for the cargo ship M/V Manpok which sank in the Indian
Ocean in March last year after colliding with the 4,411 TEU M/V Hyundai
Duke. "We paid US$6M to North Korea in Nov. as insurance companies
representing both sides agreed on the compensation in line with Int'l
convention,'' Hyundai Group said in a statement. The North Korean 15,193 dwt
cargo ship loaded with about 4,000 tons of cement sank quickly after having
hit Hyundai's 52,000 gross-ton container carrier, which was passing through
the area, about 500 miles southeast of the Sri Lankan capital Colombo. The
accident left 37 out of 39 North Korean crewmen missing with only 2
survivors, who were rescued by the South Korean ship right after the
accident. The group said its insurance company would cover the payment
later. The circumstances of the collision have been surrounded by
controversy since it happened, with reports from the Hyundai Duke stating
that the Manpok cut across its bow denied by the North Korean government,
who claim that the container ship had been shadowing the bulker.
Responsibility aside, a true tragedy of the sea.
- DSR-Senator Can't Pay Up .......... as the European Court of
Justice has rejected an individual appeal by the carrier for exemption from
a bank guarantee it was required to furnish on a fine which the European
Commission imposed on all members of the Trans-Atlantic Conference Agreement
in 1998. A continuing dispute between TACA & the commission over these
fines or their amount could go on for another "3 or 4 years," said
a vice president of DSR-Senator. The dispute over an interim bank guarantee
from DSR-Senator is only "part of the picture," the official said.
"It is no secret that DSR-Senator was under some financial strain at
the time of the TACA fine, and was reorganizing," he said. "We
dropped our round-the-world service. It was obviously no time to ask a bank
for a US$14M guarantee. So we appealed, initially to the Court of First
Instance, and then to the Court of Justice." The main dispute was over
the EC's fine in the first place, and its amount, Steffans said. He is less
worried to have lost the guarantee issue on appeal, which may still have
further stages to go. "I am confident we will find a way to settle with
the European Commission (on this)," he said. DSR-Senator has been
trading profitably since last June on a monthly basis, "but it takes
time to gain strength," he said.
- What's Left Of Sea-Land Moves On ......... as CSX Lines is now
operating its own services after its parent company, CSX Corp, sold most of
Sea-Land Services to AP Moeller. Although it is cooperating with Maersk
Sea-Land & is acting as its agent in Alaska, CSX Lines is mainly
concentrating on its own ventures. It is offering a feeder service for
larger ships in the Caribbean & offers eight liner services from the
U.S. mainland to Puerto Rico, Hawaii/Guam & Alaska. CSX has retained 16
of the flagships that belonged to Sea-Land before the AP Moeller deal. Many
of the former Sea-Land staff have moved to the CSX Lines new headquarters in
Charlotte, NC. Sea-Land, it is remembered, was the former American company
that invented containerization of cargo for the world.
- The Danger of Mayonnaise Shipments Told ......... as a freak
accident involving a drifting freight container may have caused the British
F/V Solway Harvester to sink on Jan. 11 & claim the lives of its 7 crew
members. Plastic vats of mayonnaise found near the sinking site of the
scallop trawler in the Irish Sea have raised the possibility it rammed into
a lost freight container, the Scottish Scallop Assn. said. "There were
a lot of mayonnaise bottles found round about the scene of the search so
possibly they could have come from a breached container," said John
Hermse, the group's secretary. "If one of those containers was floating
semi-submerged and the boat rolled over the top of it, then the ship would
immediately lose buoyancy, turn over & sink. So it's certainly a theory
to pursue," he added. Marine investigators said 3 freight containers
were lost overboard in the Irish Sea from a cargo vessel at the beginning of
Nov. and & some of them were still missing. But a spokesman for
Britain's Maritime & Coastguard Agency said it was unlikely a container
could stay afloat for that long, and added it was too early to speculate why
the ship sank. Officials are also investigating the possibility of a mine
hitting and sinking the Harvester. Remains of the 71-foot Harvester were
found using sonar, but bad weather has so far prevented marine investigators
from starting their probe. All 7 fisherman were from neighboring Scottish
villages, and the tragedy has hit the tight-knit Scottish fishing community
hard. Fishing groups have said it is highly unlikely a ship the size of the
Harvester would sink simply due to bad weather. Salvage experts will attempt
to raise the sunken British trawler in about 2 weeks, now that the Isle of
Man parliament agreed to foot the US$1.65M bill.
- Tasman Orient Line & New Zealand Unit Express Merge
............ as their Southeast Asia/East Asia/New Zealand services will be
revised, effective this month. NZUE is a service managed by P&O Nedlloyd
subsidiary P&O Swire. Following the change, the carriers will offer a
fixed-day weekly service between Hong Kong & New Zealand. They will also
provide direct calls for each voyage at Keelung, Auckland, Wellington &
- NVO Groups Merge .......... as the United Forwarders of Rotterdam
(Unifor), a Dutch shippers' association of NVOCCs, & the
Washington-based North Atlantic Alliance Assn. have said they will merge by
the end of the month. The NAAA was started 7 years ago as a way for NVOs to
combine their freight volumes to achieve lower rates & better service
commitments from ocean carriers. The group has worked with Unifor for about
- APL France ......... as APL, part of NOL in Singapore, will expand
in France with its own agents. As of April 1, 2000, Agence Maritime et
Containers (AMC) will transfer these agencies to new company APL (France)
which will come directly under the European head office in London. AMC will
remain subagent for the port of Marseilles/Fos. APL (France) will start
operating from the existing offices in Paris, Marseilles & Le Havre
& will sign on 40 employees of AMC.
- Free UK Tracking ......... as Maritime Cargo Processing, the
British port community electronic data interchange provider, has introduced
a free cargo tracking facility on the Internet for cargo moved via 5 major
British container ports. The real-time cargo tracking operates for cargoes
to/from the ports of Felixstowe, Grangemouth, Liverpool, Teesport &
Thamesport, five ports where MCP runs EDI systems. The cargo tracking
facility provides information concerning the carrying vessel & the
status of the consignment to importers, exporters and other organizations in
the logistics chain. For example, importers can check on the Customs
clearance status of their cargo without the need to call the clearing agent,
or they can confirm that their goods have left the port of import. The FCPS
Tracker Service relies on the shipping lines allowing their information to
be placed in the public domain. Most are expected to cooperate. http://www.fcps.co.uk
- COSCO Tracker ........... as the line has launched a new service in
order to better provide its customers with more information on their
shipments. The Internet-based provision offers cargo tracking, an electronic
data interchange (EDI) booking system for paperless booking and the choice
of making on-line inquiries on ship tracking & updated schedules. The
company also has the ability to receive tracking reports using the global
positioning system (GPS) for trucks moving cargo in mainland China. Perhaps
not all the trucks. http://www.coscon.com
- New Tax Down There ......... as a new Australian goods &
services tax is expected to impact Int'l shipping after it takes effect on
July 1. The tax is part of an amendment to Australia's New Tax Systems Act
of 1999 and will be levied at the rate of 10% and applied to all port
services, such as agency fees, pilotage, bunkering & towage. Tax refunds
will be available for services connected with exports. Port agents can apply
for these refunds on behalf of the carriers, but could take 40 to 60 days to
receive. As no refunds will be available for cargoes discharged at
Australian ports, shipowners will be forced to increase their freight rates
to compensate for this new tax burden. Freight would not be subject to the
tax, except for ships in the coastal trades.
- Again Under The Channel? ............ as a feasibility study for
the opening of a 2nd fixed link between the UK & mainland Europe has
been submitted to both the French & British governments by Eurotunnel,
the operators of the existing Channel Tunnel. Eurotunnel says the study
complies with the undertaking given in the concession signed in 1986, to
present to the principals between now & the year 2000 a proposal for a
drive-through link which shall be added to the 1st link ... and the increase
of the traffic would justify it without undermining the expected return of
the 1st link. In Nov. 1998 Maunsell Ltd. & Scentauroute were appointed
to investigate the feasibility of building the new link, which according to
Article 34.1 need only be a road link.
- Pay Up Or Pay BOTH Lawyers .......... as the Port of Houston
Authority has asked the Federal Maritime Commission for a rule making that
would make it clear that marine terminal operators have the right to collect
attorneys fees & litigation costs from their customers when terminal
operators are required to sue in court to collect fees for services
rendered. This would be, in effect, to adopt the British system of
litigation. Comments from the public are due at the FMC no later than Feb.
7. Filings can be mailed to the FMC, Washington, DC 20573-0001 or can be
sent by e-mail. Secretary@fmc.gov
- L.A. Continues Record ......... as the Port of Los Angeles posted a
16.3% increase in container volume in Nov., compared with handling 347,816
TEU the year before. The Nov. 1999 total marked the port's 7th consecutive
month of 300,000 or more box movements. More, the port moved 3,494,702 TEU
between Jan. & Nov. of 1999, a 3.5% increase compared with the 3,378,219
TEU handled by the port for all of the record-setting 1998. The port's
container volume in Nov. represents the facility's 3rd highest one-month
total of the year, an uncommon result given the Nov.-Dec. decline in
container traffic that usually follows the end of the traditional holiday
season in Oct. Next door, the Port of Long Beach handled a record 4.41
million TEUs in 1999, up 7.6% over 1998. The Port of Montreal reported a
record container throughput of 998,486 TEUs in 1999, 6.1% up on 1998.
- New World Handling Record .......... as PSA Corporation, jointly
with NYK Line, has set a new world record for vessel productivity at its
Tanjong Pagar Terminal. NYK's M/V Antares berthed at Tanjong Pagar Terminal
at noon on Jan. 15, 2000, completed discharge & loading operations of
1,375 containers in just 6 hours, and departed that same evening. With this
turnaroud time, PSA & NYK have scored a vessel rate of 234 containers
(376 TEU), breaking the previous world record of 229 containers per hour,
also currently held by PSA and achieved at Brani Terminal on July 5, 1995.
- So Long Everglades ......... as Lykes Lines, APL, Crowley American
& Evergreen are switching their joint U.S. East Coast/East Coast South
America service from Port Everglades to the Port of Miami. The restaurants
are better, by far.
- Cross Strait ........ as Taiwan has agreed to plans which will see
passenger vessels traveling between Taiwan's main port Taichung &
Meizhou in mainland China. The Mainland Affairs Council has agreed to
requests for passenger services to be opened between the 2 ports on
religious grounds, but only if chartered foreign tonnage is used and travels
via a 3rd location such as Hong Kong. The service could start operating any
time after Taiwan's elections in March. The MAC says it will only allow the
opening of the route to the mainland if its usual "security
concerns" are met 1st. Meizhou, in China's southeastern province of
Fujian, is held to be the birthplace of the goddess Matsu by believers and
there are a number of Taiwanese wishing to visit the city, most especially
on her birthday in April. Direct passenger transport links between Taiwan
& mainland China have been banned for many years.
- Zeebrugge Returns ........... as the Belgian port, saw
transshipment figures rise up to 5.3 million tons in 1999; this was a hike
of 8%. The port mainly oversees the transportation of trailers, although
last year saw only a 2.5% increase in roll-on-roll-off activity. This figure
is well below the average for the North Sea region for 1999. Still,
Zeebrugge saw a 27% rise in the amount of traffic in general goods, so
bringing the rise in transshipment for the year up to a respectable 8%. This
amount of traffic handled is a record for Zeebrugge and it has been a while
since it has been able to report such pleasing figures. 1988 was the start
of a 5 year boom period during which time cargo handled rose by almost 75%
from 20 million tons a year to 33.4 million tons per year. This period was
followed by a slump which has only just risen back up to its former heights.
- Norasia Pulls Out ......... as the French shipping line is
terminating its weekly Montreal/Northern Europe/Mediterranean container
service. The Norasia Canada Express Service was inaugurated in the summer of
1998, employing two fast 1,400 TEU vessels. The carrier will pull out of the
Atlantic trade when it ends the 7 ship weekly service in early Feb. The
termination threw into disarray the plan of Hapag-Lloyd to introduce a
direct service connecting Montreal to the Mediterranean. Having concluded a
space charter agreement with Norasia, Hapag-Lloyd announced the launch of
its service earlier this month, not knowing that Norasia would pull out of
the trade. We suggest these carriers talk a little more often.
- "Gentlemen" Welcome Danish Vessel .......... as hundreds
of angry Int.l Longshoremen's Assn. dockworkers clashed with police at
Charleston's State Ports Authority Columbus Street Terminal early on 20 Jan.
after Denmark's Nordana Line used 20 nonunion workers, guarded by about 600
police officers, to unload one of its cargo ship M/V Nordana Skodsborg.
Police used dogs & at least one smoke grenade to break up the crowd. At
least six people were treated & released from hospitals, and 8 people
were arrested on trespassing charges. About midnight, approximately 600
workers arrived at the terminal and began hurling rocks & debris at
police. Many of the protesters carried beer bottles, shouted obscenities
& chanted "ILA, ILA." Police brought in dogs as the workers
started tearing down the spotlights police had set up. News photographers
& television cameramen were struck with debris & beaten by
protesters. The ship left Charleston in the predawn hours.
- Your India Cargo Running Late, But Running ........ as Indian
unions called off a crippling 5 day strike by over 100,000 dockers at 11
state-run ports on 22 Jan. after they reached a pay agreement with the
- Your Israel Cargo, Not Yet .......... as Israel's economy has lost
more than US$24M as labor disruptions by port workers stretched into a 7th
day as of 25 Jan. Workers protesting about government liberalization plans
delayed unloading cargo at Israel's Mediterranean ports in Haifa &
Ashdod, working at 40% capacity and keeping some 60 ships waiting, the port
authority said in a statement. Four ships have been diverted to neighboring
ports in Cyprus and Egypt. The government plans to issue a tender to private
contractors to build and operate a new port in Ashdod, among other measures,
and has failed to reach an agreement with workers. There have been extensive
delays at the ports, despite an Israeli court issuing an injunction last
week against a strike. Labor officials denied strike action was being taken,
attributing the delays to precautions taken in the light of recent storms.
Shlomo Tirosh, managing director of the Agrexco Agricultural Export Co,
estimated it was costing US$700,000 a day as agricultural products rot
waiting for shipment. "We are in the height of the export season in
citrus and other fruits, vegetables & flowers," Tirosh told Israel
Radio. "The damage is irreversible."
- Mexicans Get Short Stick End .......... as foreign cargo companies
operating along Mexican shorelines with temporary permits are getting tax
benefits over the domestic competition. Local firms have lost out on some
US$14B over the past 5 years, according to Gerardo Sanchez, the president of
the Mexican Chamber of the Maritime Transport Industry. Despite efforts made
by unions & opposition parties to change the law nothing has been
changed and foreign firms continue to be exempt from tax. The Mexican cargo
industry is practically moribund, especially with the sell off of nearly all
of Transportacion Maritima Mexican's (TMM) fleet. If all true, this
situation is so in keeping with the tragic history of our dear neighbor
- Cargo In Paradise ........... as South Seas Steamship Line &
Polynesia Line, Ltd. will coordinate service between North America & the
Pacific Islands will commence effective with Voyage 282 SB of the
containership M/V Polynesia, departing San Francisco on Feb. 9, 2000. The
lines filed a proposal for a space charter and sailing agreement with the
FMC last fall to supply one vessel on a fortnightly rotation linking Los
Angeles & San Francisco with Papeete, Apia & Pago Pago. The service
will call the Matson Terminal at the Port of L.A. & Pier 80 at the Port
of San Francisco.
- Blue Star Changes Name .......... as the Montevideo-based shipping
line active in the liner trade between Northern Europe & the East Coast
of South America, has changed its name to Hansa Star Line. The name change
is related to the sale a few years ago of Blue Star Line to 2 different
buyers. The Uruguayan shipping line Montemar took over Blue Star's
Europe/South America trade, while U.K.-based P&O Nedlloyd acquired Blue
Star's U.S./Australasia & Asia/Australasia routes.
- Not The Same Old Line ........ as a new Mauritian-owned line called
La Ligne Ocean Indien, or Indian Ocean Line, has begun operating between
Northern Europe & the Indian Ocean, serving mainly Madagascar. The line
owns one vessel, the multipurpose "Yucatan," which will complete a
round voyage every 10 to 12 weeks.
- Car Container? ......... as Maersk Sea-Land has announced plans to
enter the lucrative car-carrying market by shipping vehicles in specially
designed containers. The Danish shipping giant intends to pilot the scheme
using 40 ft cube containers each holding four cars, and says that the
flexibility & high sailing frequency offered by liner shipping could be
a distinct advantage to car makers. The company also claims that vehicles
loaded into boxes are less likely to suffer damage en route. No word on how
this new system is different from how cars have been laiden in 40 footers
for many years now.
- And Free Luggage If You Order Today .......... as the administrator
of the Marshall Islands shipping register has taken considerable steps to
attract new owners to the flag. Int'l Registries Inc.(IRI). He formerly ran
the Liberian registry and decided that all ships registering in the islands
by June 30 this year will do so free. The annual tonnage tax will also be
cut from US$0.25 per gross ton to US$0.2 per net ton, slashing owners'
annual tax by 50% on average. Owners of vessels already flagged in the
Marshall Islands will have the reduction recorded as credit against next
year's tax bill. The open register currently has around 270 ships of about
7.5 million gt. IRI denied that the move was an attempt to take tonnage away
from Liberia, whose flag the company ran until the end of last year.
Operators are standing by.
- CMA-CGM & K Line Swap ......... as the French carrier has
finalized a slot exchange agreement with Japan's K Line for the Northern
Europe/Far East trade. The arrangement has been in operation since January 1
& allows CMA-CGM to offer their North European clients the ability to
load cargo on vessels that call at Japanese ports directly. All services on
CMA-CGM's Europe/Asia trade miss Japan on the eastbound leg. However, K
Line, because of its alliance with Yang Ming Line & COSCO, does offer
such a call. In return the K Line associates will get equitable slots on
CMA-CGM vessels to other Asian destinations.
- M/V Romana I Under Arrest .......... as Haiti has seized a cargo
ship & arrested its captain and chief engineer in a dispute over cargo
bound for Trinidad and Tobago, the ship's charterer said on 3 Jan. Pyramid
Shipping Consultants in Trinidad, said the company had asked Haiti to act
after the M/V Romana I, carrying US$300,000 worth of construction equipment,
ignored instructions to deliver the equipment in Tobago and sailed with it
to Haiti -- which was not a scheduled call. The ship's owners, Florida-based
Caribbean Ship Management, allege that Pyramid Shipping owes them money. The
company could not be reached for comment at its Miami offices. Pyramid
denied it owed the owners money or that anyone would want to visit Haiti on
- M/V Legionario Under Seige ........... as Greenpeace activists
climbed 2 cranes in the port of Aarhus in western Denmark on 23 Jan. to
block the unloading of a shipment of what it said was genetically modified
animal feed. The protest came as delegates from 134 nations were gathering
in Montreal for negotiations on a United Nations-sponsored agreement aimed
at protecting biological diversity. The ship arrived from Argentina with a
45,000 ton cargo, a mixture of naturally grown & genetically modified
soy beans. In related news, the 2 largest natural-food store chains in the
U.S.- Whole Foods Market & Wild Oats Markets Inc., announced they would
ban the use of genetically modified organisms in their private-label brands.
- Columbia Coastal Transport ............ as its new 912 TEU capacity
super-barge get underway. As one of the largest of its kind, the barge will
be deployed on a U.S. East Coast-U.S. West Coast route via the Panama Canal
bringing the U.S.-flag container feeder barge operator's total capacity up
to 6302 TEU. The Columbia Elizabeth is capable of transporting full
containers, empties and special large cargo on its 5,900 mile route round
the coast of the U.S. The company sees this all-water form of transport as
helping reduce congestion on roads & therefore pollution. Dimensions are
343 x 94 x 21 feet.
- Gunmen Request Badges, Perhaps To Arrest Themselves ........... as
former members of the Moro National Liberation Front in the Philippines
seized the port of Pollok last week demanding jobs as security guards at the
facility. The gunmen, numbering around 100, took control of the
administration building in the port, which is in southern Mindanao, &
evicted its staff. Although no hostages were taken & no threats made,
operations at the port were badly affected by the incident until negotiators
persuaded the men to end their occupation. The MNLF signed a peace deal with
the Philippines government in 1996, with many members of the group joining
the army & police. The reformed members of this group are to be
- Mayday! Drunk "Capt." Caught In The Tub.......... as a
Danish man set off a real-life sea rescue mission on Jan. 7, while playing
with toy ships in his bathtub. The drunk 52-year-old called in repeated
mayday alarms to the Maritime Sea Rescue Command as he piloted his water
toys, claiming he was captain of a 12-crew freighter in distress. Giving a
position west of the Baltic Sea island of Bornholm, which belongs to
Denmark, he said his vessel was listing 45 degrees & that one crew
member had been washed overboard. The authorities leaped to respond, sending
2 rescue vessels to search the area for 1.5 hours. But police eventually
traced the phone calls to the home of the intoxicated man, who admitted the
false alarm. He faces fines & compensation claims of 10,000 crowns
(US$1,400) for the "disaster," which police told the daily
Sjaellands Tidende newspaper was the 1st of its kind on record. The
remaining 11 crew aboard the bath toy are presumed safe. We mourn the one
washed overboard & down the drain.
- This Month In U.S. Naval History .......... as on January 17, 1955,
USS Nautilus (SSN 571), the 1st nuclear-powered submarine, is commissioned
& sends message "underway on nuclear power." On August 3,
1958, Nautilus would be the 1st ship to reach the North Pole in world
Visit our new Vessel
Casualties & Pirate Activity Database. This is only a partial list of of
casualties for the month in that most dangerous place ....... out there.
The Maltese bulk carrier M/V SEMENA (13,457 gross), in ballast, grounded off
Tuapse, while waiting to load, in lat 44 20.1N, long 38 31.4E, Jan 22. Still
aground Jan 25. No apparent damage. (Wed. Jan. 26 2000)
The Panamanian research vessel M/V TEKNIK PUTRA (1,009 gross) grounded on
Thursday Island, in lat 10 34.28S, long 142 14.9E, Jan 24. Refloated with tug
assistance same day. Anchored at Cape York. No apparent damage. (Tues. Jan. 25
The Liberian bulk carrier M/V DECURION (34,839 gross), from Argentina with
rice, was in collision with the Panamanian container vessel M/V MSC GIOVANNA (
27,103 gross) off Cape Town Jan 21. Decurion holed & down by stern, however,
proceeded to Cape Town under own power. MSC Giovanna sustained minor damage
& proceeded for Durban. (Mon. Jan. 24 2000)
The Taiwan M/V YU TAI NO. 6 (2,981 gross) sank in lat 24 57N, long 120 30E,
Jan 20. 1 crew member rescued safely. 1 sighted in water. Search continuing.
(Sat. Jan. 22 2000)
The Brazilian tanker M/T LONDRINA (27,063 gross), with cargo fuel oil,
reported drifting 80 miles northwest of Barbados Jan 19. Taken in tow by tug S
mit Curacao bound Barbados, where ETA Jan 20. (Fri. Jan. 21 2000)
A crankcase explosion on 20 Jan. in the main engine of 6,600-TEU M/V
Sovereign Maersk resulted in the complete loss of propulsive power and the
abandonment of a voyage from Hong Kong to Long Beach. The vessel, which is in
the largest class of containerships afloat, was taken in tow and is expected to
reach Kobe on 26 Jan., where it will discharge all its cargo. The Sovereign
Maersk is the first of Maersk Sea-Land's 9 ultra-large "S-class"
containerships. It was named by M/V Queen of Denmark in 1997 has been featured
frequently in the line's publicity. The explosion injured the ship's 1st
engineer, though not seriously. The engine room had to be flooded with CO-2 gas
to extinguish the fire. Cause of the explosion wasn't immediately known. The
Sovereign Maersk's engine was of a type installed in other containerships,
including Maersk's 6, slightly smaller, K-type containerships, said Jesper
Kjaedegaard, Sr. V.P. of A.P. Moller. Kjaedegaard also pointed to the advantage
of his organization's size in responding to a problem like this. It was
fortunate that a powerful A.P. Moller tug was on hand to take the Sovereign
Maersk in tow, avoiding the need to discuss salvage, and that the 3,600-TEU M/V
Sea-Land Initiative could be diverted to Kobe to load the Sovereign Maersk's
boxes for Long Beach. (Thurs. Jan. 20 2000)
The Greek M/V TORM BROOKLYN (13,688 gross) was reported disabled 800 miles
southeast of Bermuda Jan 15. Tug proceeding. ETA Jan 19. (Thurs. Jan. 20 2000)
The Norwegian M/V ALUTRANS (1,555 gross), Ghent for Rausand with aluminum
slag, grounded at Gurskoya Jan 16. Subsequently arrived Molde Jan 17 with a
severe list and taking water. (Wed. Jan. 19 2000)
The Indian tanker M/T RICHA (6,681 gross), with lubricating oil, was disabled
by an engine-room fire in abt lat 19 47N, long 87 30E, Jan 15. In lat 19 40N,
long 87 28.7E, Jan 17 and requires towage. (Tues. Jan. 18 2000)
Antugua & Barbuda vessel M/V MEMEL, (2,997 tons gross, built 1999) had
fire in engine-room in lat 44 46.7N long 08 56W Jan 15. Main engine inoperable.
Being towed to Corunna by salvage tug Ibaizabal Uno. (Mon. Jan. 17 2000)
The Faroe Islands refrigerated M/V HALGAFELLI (1,957 gt) grounded north of
Anda Light in the Vesteraalen Islands. Crew rescued & brought to Sortland.
Vessel refloated herself early today, drifted against Andoya Island with large
list & sank. (Thurs. Jan. 13 2000)
Syrian M/V LADY HADIL (481 gt) grounded on Irwas Island, near Tartous 1230,
Dec 27, due heavy storms. No refloating attempts made to date. (Wed. Jan. 12
Honduran M/V MATTHEOS (2,417 gt), loaded with 2,500 tons of iron, sank today
after taking on water while docked at Kalamata port. Crew safely rescued. (Tues.
Jan. 11 2000)
Singapore bulker M/V J. MARION SKY (23,277 gt, built 1991) was in collision
with the 1999-built Antigua & Barbuda M/V INDUSTRIAL CENTURY (4,246 gt,
built 1999) in lat 20 08N, long 83 32W, in clear weather on Jan 7. The handymax
vessel, carrying a cargo of alumina hydrate and sand, sank nine minutes after
the collision and 19 of the ship's 21 Philippine crew were rescued. The master
of the ship & another crewmember have not been found, and the search for
them has been abandoned. The survivors were picked up by the badly damaged
Industrial Century's sister ship M/V Industrial Beacon, which was in the area at
the time of the incident. The Century is heading for Curacao for repairs. The
cause of the collision is unknown. (Mon. Jan. 10 2000)
The Bahamas passenger vessel M/V ISLAND BREEZE (31,793 gross), Casablanca for
Tenerife with passengers, had boiler problems after sailing Funchal on Jan 5
& put back to Funchal Jan 6. Some passengers returning to UK, some remain on
board. (Sat. Jan. 8 2000)
The Norwegian ferry M/V BARONEN (172 gross), Bergen for Olen with passengers,
struck an unidentified object near the Ruanane Light, off Flesland, Jan 5.
Moored Flesland same day. Sustained damage to bow section & taking water.
Reported in danger of sinking. (Fri. Jan. 7 2000)
The Russian M/V DVINA (2,426 gross), Brightlingsea for River Humber with
timber, grounded while outbound from Brightlingsea Jan 1. Refloated Jan 5 and
proceeded. No pollution. May have sustained rudder damage. (Thurs. Jan. 6 2000)
The Panama M/V WOO YANG GLORY (2,415 gross), Kwangyang for Nagoya with steel,
grounded off Mutsure Island Jan 3. Refloated with tug assistance Jan 4 and towed
to Wakamatsu for inspection. Expected to have sustained bottom damage. (Wed.
Jan. 5 2000)
The Cyprus bulk carrier M/V AIS MAMAS (10,273 gross), West Africa for India
with logs, had water ingress into Hold No.1 off Cape Columbine Jan 1. All crew
abandoned vessel & safely rescued. Tug Red Toucan proceeding, ETA Jan 3.
Will tow to Saldanha Bay. (Tues. Jan. 4 2000)
The Ukrainian cargo ship M/V Tiksi (2,300 gross), flying a Cambodian flag,
sank early 2 Jan. in the Black Sea and 1 crew member drowned, the Russian
Emergency Situations Ministry reported. The other 11 crew members were rescued
from life boats about 8 miles from the Russian shore near the resort of Dzhugba,
a duty officer in Moscow said. They were taken to shore on a tugboat. The vessel
was sailing between Nikolayev, Ukraine & Poti, Georgia when it went down.
The ministry said that the cause of the sinking was unknown, but it may have
been stormy weather. No other details were available. (Sun. Jan. 2, 2000)
Seventeen people, including 2 young children, were rescued after abandoning
the Syrian-flagged cargo vessel M/V Seven Seas in distress off Cyprus on 31 Dec.
The survivors, described as 12 Syrians & 5 Romanians, were winched to safety
by British royal air force and Cypriot police helicopters some 33 miles
southeast of the East Mediterranean island. Most were crew of the vessel, which
was laden with a cargo of steel on its way from Ukraine to Djibouti on the Horn
of Africa. When rescue teams arrived about an hour after the first distress
signal was issued the survivors were found on two rafts. A helicopter search
failed to locate the ship. Police said they were still investigating what
triggered the distress call. "We assume it is on the sea bed by now,"
a rescue official told Reuters. The survivors included 2 young children. Whole
families living in ships is not uncommon and many merchant ships now have such
facilities. The distress signal was 1st picked up via satellite by British
forces stationed in Cyprus. (Fri. Dec. 31 1999)
Spanish ro-ro vessel M/V ARROYOFRIO DOS ( 8,126 gross tons, built 1985)
experienced steering problems off Ushant on Dec 27. Will proceed to Brest with
tug assistance. (Thurs. Dec. 30 1999)
The Russian-flagged tanker M/T Volganeft 248 broke in two & its bows sank
on 29 Dec. near the mouth of the Bosphorus, among the world's busiest shipping
routes, spilling oil onto Istanbul's residential coastline. Turkish coast guards
rescued 12 of the 17 man crew of the vessel which ran aground in strong winds
overnight, after securing the stern of the vessel with cables to the shore. Five
other crew members who initially chose to stay on board were taken ashore later.
The ship, carrying 4,300 tons of heavy fuel oil, had passed through the
Bosphorus strait when it went down. There was no disruption to traffic. Russia's
Ministry for Emergencies said the vessel was of a type that normally plies the
Volga-Don canal to pick up loads from the Volga's refineries. Thick layers of
sludge washed into a nearby residential district, coating roads & sidewalk
cafes. Bulldozers scraped up the spillage while shopkeepers donned rubber boots
and grabbed shovels to pitch in. A strong wing halted work to prevent more oil
from spilling into the sea. Istanbul municipality decided to impose a US$36,380
fine on the tanker's owner for pollution. (Wed. Dec. 29 1999)
M/T Erika Follow Up ......... as finger-pointing in the Erika sinking has
continued, with an angry rebuff coming from the Maltese authorities following
criticism of their shipping register, which had the tanker on its books.
Responding to comments made by the French ambassador to Malta, Lino Vassallo
from the country's maritime authority said: "It would be better if
statements from people who are not technically authoritative on the subject were
not made because they give the wrong impression and a distorted picture. I
understand the reaction of the French people when faced with the disaster on
their coast, and the tendency is for people to start pointing fingers. But when
it comes down to reality, we did everything we had to do." The comments
came as France switched the focus of its blame to Italian classification society
Rina for failing to handle the ship properly and the EU stepped up its pressure
on the Maltese and Cypriot flags to improve their standards before they joined
the European Union.
Doubts were apparently raised over the thickness, and thus the strength, of
longitudinal structures around the number 2 ballast tanks by a Rina surveyor.
Although he was unable to make thickness measurements, he recommended that a
further check be made in January this year, by which time the tanker had sunk.
The classification society has begun its own examination of the cause of the
sinking and said: "It is proper to expand the range of the inquiry in this
important matter as it is unacceptable to express hasty and unfounded opinions
about responsibilities at this stage. The investigation is underway and there is
no evidence that the sinking of the ship may be linked to errors or omissions by
Rina." In the meantime, the lawyer acting for the ship's master has said
that Capt. Mathur had spotted rusting in one of the tanker's ballast tanks in
Nov. and had reported this to its owner, Tevere Shipping, as well as to Rina.
The classification society denies receiving any such report.
More on The Loss of M/T Erika ........ from our friend Barry Parker. Great
Incident Report For M/V Lassia ........ salvage efforts info, pictures &
commentary regarding the bulk carrier "Lassia" sagging incident last
NOTE: The historic dangers of carriage by sea continue to be quite real. Shi
ppers must be encouraged to purchase high quality marine cargo insurance from
their freight forwarder or customs broker. It's dangerous out there.
Here are our suggested world wide web sites of the week for your business,
your information & your amusement ...............
IATA Y2K Rollover
Website ........ new material sine the "magic day."
THE Certified #1 Most
Complete Shopping Site ....... includes transport industry shopping. No
U.S. FDA Food Safety
Int'l Center For Trade &
Sustainable Development Calendar
INCOTERMS 2000 ........ from our great friend Peter Jones, the chief
legal counsel for FIATA.
Int'l Chamber of Commerce Bookstore
............. get the new Incoterms, effective 1 Jan. 2000.
World Trade Organization
Meeting Schedule ........ if you'd had this in Seattle last month, you
would have known to leave town!
Win The "Name The Irish Ferry
Contest" ........ free trips for life! Hurry, ends this month.
Green Shipping Hamburg Conference
............ Int'l Conference on Incentives for Environmentally Sound Maritime
Transport , 16 - 17 Feb.
Int'l Ship Suppliers Assn.
Logistics.com ........... Dr.
Jossi Sheffi, director of the Center for Transportation Studies at the
Massachusetts Institute of Technology has begun a new e-commerce company
Argosoft Software ..........
new program allows shipping companies to track jobs from an initial job estimate
to the actual billing of the client with speed & simplicity. Argosoft is
claimed as a great improvement over existing software programs for this task.
........ the new website.
ABF Freight System ........ as
several new E-Commerce tools, including Shipment Planner, which offers shipment
management and tracking via a simple calendar interface, & Dynamic
Rerouting, which allows in-transit shipments to be rerouted via ABF's Internet
American Freightways .......new
features are color-coded service maps & through-rates between U.S. &
...........hosts an online vertical marketplace where buyers & sellers of
fruit juice and fresh fruit meet to do business.
Cup ........ special coverage of the world's most prestigious yacht
race, from The Weather Channel.
Shipbuilding Online Conference
Railroad Stocks Special Report
............ from the Wall Street Journal.
"Untreated Water & The
Traveling Sailor" ........ new article.
"Traveling Off The Beaten
Path? Get a Hepatitis Vaccine" ......... new article.
Teamsters On Strike At Overnite
Transportation ......... their side told. See our full story of this
conflict in Part 1, above
National Shipbuilding Research &
Documentation Center ...... has just released two page turners. If
you're in the business, you'll be interested.
1.] NSRP Ship Structure Application Protocol. Report #0429
2.] NSRP Piping Application Protocol. Report #0424
Intercontinental Airport ...... Houston
Tall Ship Friends
Aberdeen Boat Club
Topica ...... where you go to
sign up for Internet discussions groups. An increddible range.
Online Seminar ........... March 23 & 24, 2000, at the Ramada Plaza
Hotel Int'l in San Francisco. A nationally recognized faculty of legal &
business professionals will provide invaluable information for all lawyers &
corporate managers involved in developing businesses on the web.
of Free Photos & Screen Savers .......... for our readers.
The Hamster Dance ........
annoy everyone in your entire office with a single website, if you have sound.
Cut to the chase!
LAX - 19 Jan. 2000 -- A blue-ribbon panel of specially appointed retired
judges has ruled that over 1,000 truck drivers who operate out of the Los
Angeles & Long Beach harbors are correctly classified as independent
In this most recent challenge to the manner in which hundreds of harbor-based
trucking companies throughout the U.S. do business, this panel rejected the
claim that the truck drivers were employees, and in doing so, set back the
continuing efforts of various unions to organize harbor truckers, independent
truck owners & drivers who haul containers out of the Los Angeles & Long
This action was filed as a class action on behalf of all truckers who
contracted with Interstate Consolidation Services & Intermodal Container
Services since July 1992.
The case of IRWIN ALBILLO & LUIS MONTOYA Vs. INTERMODAL CONTAINER
SERVICE, INC., (L.A. Superior Court Case No. BC 174508) was tried as a class
action in Aug. & Sept. 1999 before Retired U.S. District Court Judge Eugene
Lynch, Retired Calif. Court of Appeal Chief Justice Arleigh M. Woods &
Retired L.A. Superior Court Judge Keith Wisot.
These judges, in a unique procedure authorized by the Calif. Constitution,
were specially appointed by the L.A. Superior Court & the Workers'
Compensation Appeals Board to try the action.
The key issues put before the Court: (1) whether the class members were
correctly classified as independent contractors or whether they were actually
employees; (2) whether the class members were converted to employees because
they agreed by contract to purchase worker's compensation insurance as a
prerequisite for contracting with Intermodal; (3) whether Intermodal's
requirement that the class members purchase certain insurance through them or on
their own violated federal transportation regulations (49 C.F.R. 376.12), Calif.
insurance law or the Unfair Business Practices Act; and (4) whether the
retention of insurance monies collected over & above the cost of insurance
as an administrative fee constituted an unfair business practice or fraud.
The three judge panel unanimously found in favor of Intermodal on each issue.
"The nation's entire transportation industry has been following this case
and waiting for this decision," explained Intermodal's lead attorney Robert
Millman. "Every major port, from Seattle to New York, will be impacted by
The courts have shown a willingness to confer employee status on workers not
classified as employees by the companies they work with (as in Microsoft v.
Vizcaino). However, the Intermodal decision affirms that the manner in which
harbor trucking companies conduct business using independent truckers is both
legal & fair, and in conformity with federal & state law.
It also represents the latest in a string of setbacks to unions who have
attempted to organize the harbor drivers. "It represents a win for the
trucking industry and the truck drivers, who have the ability to, and in fact
do, earn more for themselves and their families working as independent busines
smen than they would as employees," added Keith Jacoby, lead trial lawyer
in the action.
Originally filed in July 1997, this case was one of 33 class actions filed by
the plaintiff's attorney against other intermodal trucking companies. It was the
1st of those cases to be tried, but certainly not the 1st such look at the port
trucker issue by California courts.
A similar, non-class action Los Angeles Superior Court lawsuit attempting to
outlaw the independent contractor status of port truckers was defeated prior to
the significant expense of a trial in 1996 by the LAX logistics law firm of
Countryman & McDaniel, publishers of The Cargo Letter.
- Reuters Continues The Watch
KUALA LUMPUR, Jan 24 (Reuters) Pirate attacks worldwide surged 40% in 1999 as
economic and political troubles in Indonesia spurred a dramatic increase in
incidents in Southeast Asia.
The Int'l Maritime Bureau (IMB) said in its annual report on 24 Jan. that the
number of actual & attempted pirate raids increased to 285 last year from
202 in 1998.
But the number of seafarers killed fell to 3 last year from 78 in 1998.
"This could be due to greater efforts by governments to combat
piracy," the report said, citing the recent sentencing to death of 13
pirates in China.
Indonesia accounted for 113 of the attacks, almost double its 1998 total of
60 and the lion's share of worldwide raids.
"We believe it was due to the economic situation & political
instability," Noel Choong, regional manager of the IMB's Piracy Reporting
Center in Malaysia's capital Kuala Lumpur, told Reuters.
He was referring to upheavals in Indonesia after the resignation of former
President Suharto in 1998.
PATROLS CAN HELP
There was also a dramatic increase in the number of attacks in the Singapore
Strait, which separates Singapore island from Indonesia's Riau Archipelago &
links the Strait of Malacca with the South China Sea. There were 13 compared
with just 1 in 1998.
But Choong said the frequency of attacks in that area dropped sharply after
the Singapore Coast Guard and the Indonesian Marine Police stepped up patrols,
and no incidents were reported in the final three months of 1999.
"It is a very clear indication that with cooperation, authorities can
reduce piracy or eradicate it altogether," Choong said.
The IMB has asked Indonesia to mount more patrols in its waters. "There
may be a decline in attacks if the Indonesian authorities are serious about
eradicating piracy in their region," Choong said.
Seven countries or regions accounted for more than 2/3 of the attacks --
Indonesia (113), Bangladesh (23), Malaysia (18), India (14), Singapore Strait
(13), Somalia (11) & Nigeria (11).
Attacks dropped from 15 to 6 in the Philippines & from 10 to 2 in
Most of the attacks -- 217 of 285 - involved pirates boarding ships. There
was a decrease in the number of hijackings to 8 from 17.
There were also fewer assaults on crews, but many more incidents of crews
taken hostage. Knives rather than guns were the most common weapon.
INDIA, CHINA STEP UP EFFORTS
The IMB cited government efforts to combat piracy as a possible explanation
for the dramatic decline in the number of crew killed last year.
"In the last year, both India & China have arrested alleged ship
hijackers and China recently sentenced to death 13 of the hijackers of M/V
Cheung Son, one of the country's most brutal recent cases of piracy involving
the murder of 23 Chinese seamen," it said.
Last month, a court in China's southern province of Guangdong sentenced the
13 men, all Chinese except for one Indonesian, to death for clubbing the seamen
to death & throwing their bodies overboard tied to weights.
The pirates had posed as Chinese paramilitary police and hijacked the 10,373
GRT bulk carrier M/V Cheung Son in Nov. 1998.
Visit our new Vessel
Casualties & Pirate Activity Database.
Written from wire stories, the Associated Press,
Reuters, Hong Kong Shipping News Lloyds & other world sources.
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