Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
28 February 2005
Good Monday Evening from our Observation Deck......overlooking the officially designated "Cargo City" area and...... Runway 25-Right, at Los Angeles International Airport, voted "Best Cargo Airport in North America." Here is your news for the month of February 2005.
To help you find what you need -- FAST -- there's now a transport search engine installed at our Cargo Law.com website!
Contribute your knowledge, stories & company information.......by e-mail to The Cargo Letter. We strive to bring you useful information which is timely & topical. Be sure to visit our website.
Our corporate sponsor &endash;- Interpool, Inc. -- named again to Forbes "Best 200 Small Companies" List -- for the 2nd consecutive year! -- http://www.interpool.com/Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker attorneys at LAX.
INDEX to The Cargo Letter:
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs ______________
2. The Cargo Letter Financial Page ______________
OUR "B" Section: FF World Ocean News***
3. Freight Forwarder World Air Briefs ____________
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs _____________________
5. The Cargo Letter Cargo Damage Dispatches _____
**Back By Popular Demand**
OUR "D" Section: FF in Cyberspace***
6. The Cargo Letter "Cyber Ports of Call" _________
OUR "E" Section: The Forwarder/Broker World***
7. New Transport Related Legal Cases ___________
Back To Main Page
OUR "A" Section: Trade, Financial & Inland News***
1. Freight Forwarder Trade Briefs _____________
***BREAKING NEWS>> Yellow Roadway Corp. Buys USF Corp. ......... as at press time, the deal between these 2 largest U.S less-than-truck load (LTL) companies tops US$1.37Bn. The new company will have estimated annual revenue of US$9Bn, more than 70,000 employees & 1,000 service locations. Yellow to assume US$99M in USF debt.
***End of China Quota -- In the Wake ....... as EU trade commissioner, Peter Mandelson, has expressed concern over the growth of textile exports from China following the abolition this year of quotas and has called for tighter controls, the Financial Times reported. Speaking recently before his official visit to the mainland, the EU commissioner urged the Beijing authorities to trade "freely & fairly". Mr Mandelson said: "I want to discuss with the Chinese government curbs that they could make to moderate export growth". According to the report, Mr Mandelson also spoke about the possibility of using a "special system" (code for tariffs?) to curb Chinese textile imports into Europe, which have grown significantly since the quota system was phased out in the new year. "It is quite possible that Europe will use special safeguards, but not certain," Mr Mandelson was quoted in the report. The European commissioner also spoke out against the mainland's "lack of protection for intellectual property rights" saying that this was also an area of concern for the EU.
***End of China Counterfeiting? -- Would Be Nice ...... as the U.S. Chamber of Commerce has asked the Office of the U.S. Trade Representative to enter consultations with the World Trade Organization regarding on-going counterfeiting & intellectual property rights violations in China. In addition, the Chamber has asked the Bush Administration to list China as a "priority watch country" for piracy violations. "China has failed to adequately enforce its own laws & regulations when it comes to piracy & counterfeiting violations," said Myron Brilliant, chamber V.P. for East Asia, in a Feb. 10 statement. "This is an endemic problem with immense consequence for the U.S. economy, our companies, particularly small & medium-size businesses, and public safety," he added. The Chinese government has made some recent efforts to put the brakes on product counterfeiters, but the Chamber said there's little evidence that these measures have made significant impact.
***A Big Engine ...... as according the U.S. Chamber of Commerce, transatlantic investment between the U.S. & European Union is about US$1.8 trillion yearly. The transatlantic economy generates more than US$1Bn in trade per day, & employs more than 12 million people, the U.S. chamber said.
***Currency Revaluation Won't Hurt China Competitiveness ....... as contrary to popular belief Chinese yuan appreciation is unlikely to force mainland manufacturers to significantly increase their prices and thereby reduce their competitiveness in Int'l markets, according to a report in The Wall Street Journal. The story cited the example of the world's largest producer of athletic shoes, Yue Yuen (Industrial) Holdings, which is said to control 17% of global market share and rely heavily on cheap Chinese labor. The manufacturer, according to the article, estimates that a 5% increase in the yuan's value against the greenback would result in just 1% higher costs for the company. The report also claimed that expenses paid for in yuan typically make up only a fraction of Chinese exporters' total costs. One-fifth of Yue Yuen's production costs are in yuan & mainly consist of labor & utility expenses at its Dongguan factory base. A stronger yuan would in fact serve to lower the cost of importing raw materials for manufacturers which traditionally import about half of their production materials, according to the report.
***Shanghai Remains In Orbit ..... as statistics provided by the Shanghai Customs Authority show that the total value of trade handled by the port in Jan. increased 23.8% year-on-year to US$24.9Bn, Xinhua reported. Figures for Jan. 2005 showed that exports grew 23% to US$15.9B, while imports surged 24.4% to US$9.87Bn compared to Jan. 2004. The report said trade with most of its major trading partners registered double-digit growth during Jan., with the EU being Shanghai's largest trading partner accounting for a total of US$5.23Bn worth of business. Trade with the U.S. totalled US$3.67Bn, while imports from Japan reached US$1.8Bn.
***Shanghai Port & High Tech ...... as exported hi-tech products with a total value of US$45.4Bn last year, up 72% over the previous year, reported The Wall Street Journal, citing statistics released by Shanghai Customs. The rise in exports was attributed in the report to Int'l manufacturers expanding their operations in the Yangtze River Delta region concentrated mainly in industrial parks in Shanghai, Wuxi, Ningbo & Changzhou. The top exports were said to be computer, photoelectric & communication products.
***Proposed AES Filing Rules ...... as the U.S. Census Bureau has published its long-awaited proposed rules for mandatory electronic filing of export information to the government. This legislation also requires the implementation of civil & criminal penalties for failure to file export information electronically, and authorizes the designation of staff from the both the Commerce Dept.'s Office of Export Enforcement & the Homeland Security Dept.'s Customs & Border Protection to perform enforcement duties. Under the current regulations, export information is collected from both paper & electronic transactions filed by exporters or their freight forwarders. Census uses the data to compile the nation's trade statistics, while CBP uses the information to target illicit outbound cargoes. Since 1995, the government's Automated Export System has allowed exporters and their approved forwarders to file shipper's export declarations electronically. Census also offers the industry free Internet-based filing capability through AESDirect. The export industry has until April 18 to comment on the proposed mandatory AES filing rules.
***Forget The Little Stuff ........ as U.S.Customs & Border Protection (CBP) issued a rule raising the threshold value of seized property for which the agency must publish a forfeiture notice in a newspaper from US$2,500 to US$5,000. The change comes into effect March 24.
***Friends In High Places ....... as Kerry Logistics says that its joint venture with the commercial arm of China's police, Huatong, has helped the company achieve the type of network expansion on the mainland that would have taken the Hong Kong-based firm years to achieve on it own. The company is said to be banking on its joint venture with Huatong to help it expand its network coverage from 8 China cities to 120. Kerry Logistics paid Huatong US$45.9M for a 70% interest in Chinese freight forwarder, EAS Int'l Transportation, in a deal that was wrapped up last month, reported the Financial Times. It claimed that senior executives at Kerry Logistics have expressed confidence that the transaction would more than double the firm's annual turnover from HK$2.3 billion (US$294.8M) in 2004 to HK$5 billion this year, driven by higher sea & air freight volumes. The report noted the company's reluctance to discuss the usefulness of having connections with the mainland police, but one industry expert was quick to point out that it would definitely help it to receive payments on time. Pay the charges -- or we call our cops! They should franchise this.
***EU Economy Rolling ...... as heavy-duty truck sales in Western Europe rose 9.3% in Jan. to 22,682 vehicles, the European Automobile Manufacturers told Bloomberg News. Comparable U.S. January Class 8 sales truck sales rose 61.9% to 18,257, a record for the month of Jan. 2005.
***U.S. Economy Rolling ...... as overall trucking freight volumes rose 3.4% to 116.5 (2000=100) in Jan., a record high, according to an American Trucking Assoc. index. The gain in ATA's Truck Tonnage Index was the largest month-to-month gain in several years and was 6.4% higher than a year ago, the group said. The rise followed a revised 1% decline in Dec. On a non-seasonally adjusted basis, the tonnage index fell 2.4% from Dec. to Jan., ATA said.
***U.S. Rails Rolling ...... as the Assoc. of American Railroads said Feb. 24 that intermodal volume grew 22.8% for the week ended Feb. 19 over the previous year. Rail intermodal volume totaled 222,937 trailers or containers for the week, AAR said. Trailers were up 6.1% and containers grew by 29.5%. Railroad volume is considered an important economic indicator. Intermodal traffic, which tends to be higher-valued merchandise than bulk commodities, uses trains for the long haul and trucks for the shorter distance at either end of the trip. Total rail carload freight shipments grew 4.9% over last year, to 350,225 loads.
***Any House But The White One ...... as CSX Corp. has sued the District of Columbia, challenging the city's new law banning hazardous shipments within two miles of the U.S. Capitol. In a U.S. District Court filing, the freight railroad asked that the law be declared unconstitutional on grounds that it impedes interstate commerce. Federal law requires the company to transport the banned materials, and the city's ban is an "unreasonable burden," the company wrote. Less than 24 hours after he signed the bill into law, Mayor Anthony A. Williams vowed to defend it in court as a way to protect citizens against possible terrorist attack. D.C. Council members have pressed the company to say whether hazardous cargoes are still routed through the city. While the company may have redirected the shipments away from the rails that run closest to the Capitol, council member Kathy Patterson said they are still running through "a heavily packed residential area.
***FedEx Freight Grows In Golden State ........ as the LTL subsidiary of FedEx Corp. has opened a new facility in So. California and is moving forward with plans to construct a major consolidation center near Sacramento, Calif., by 2006. In California - where FedEx Freight already maintains 25 full-service facilities - is a new 52,000-sq. ft. center in Gardena with 92 service doors on a 13-acre site, more than double the size of the former 40-door center. Nearly 150 employees work at the new center. The company also will expand its presence in the Northern California region as it moves forward with plans to construct a 152-door facility on a 51-acre site in West Sacramento. The new 115,000-sq. ft. center will replace the current 17-acre, 127-door complex. More than 450 employees are assigned to the current Sacramento center.
***Kuwait Buys Singapore ....... as PWC Logistics, a Kuwait-based logistics provider, has acquired Singapore-based logistics services provider Trans-Link Group, for an undisclosed amount. Established in 1982, Trans-Link has logistics activities in Asia, South Africa & Latin America. Its activities include specialized supply chain management services in the areas of exhibition & event logistics, e-fulfillment & project forwarding.
***C.H. Robinson Worldwide Picks Up Some Groceries ...... as it has acquired 3 produce sourcing & marketing companies. Terms not disclosed. The transportation & logistics firm said it bought FoodSource Inc., FoodSource Procurement LLC & Epic Roots Inc. Together the acquired companies combined had gross revenues of US$270M in 2004. The FoodSource entities were established in 1998, and all of company's 52 employees will be offered jobs with C.H. Robinson, the company said. Epic Roots was established in 1997.
***Schenker's Budapest Move ....... as its Hungarian subsidiary, Schenker Kft., has moved into a new logistics center in the Budapest Intermodal Logistic Center (BILK). The state-of-the-art 65,000 square meter complex consists of office space to house the company's corporate and administrative staff, a logistics storage area, general cargo terminal, & hazardous materials warehouse for high value/high risk cargo Located south of Budapest, BILK is said to be one of the largest intermodal terminals in Europe for rail & road transportation.
***They Also Have A Problem With That Cheese Put On Burgers........ as an global anti-tobacco treaty that came into force Feb. 27 needs strengthening fast, a leading expert said. Dr. Derek Yach, the World Health Organization's former anti-tobacco chief who oversaw the drafting of the treaty, hailed the accord known as the Framework Convention on Tobacco Control as a 1st step. However, he told The Associated Press that the treaty lacks both "teeth" & "protocols" - - additional agreements that toughen it in specific areas. The treaty, which was finalized in May 2003, aims to substantially reduce the number of deaths from tobacco-related illness. Of the 168 countries that signed the accord, only 57 have so far ratified it. China & the U.S. are among those who have not ratified the pact. The treaty, known as the FCTC, requires its ratifiers to restrict tobacco advertising. Ratifying countries that fail to enact reforms face no penalties but will have their record examined at U.N. anti-tobacco conferences, the 1st of which is set for Feb. 2006.
***Post 9/11 Security Is The Aces ...... as thieves hijacked an armored truck carrying diamonds & jewelry from Amsterdam's Schiphol airport Feb. 4 & escaped with their haul, Dutch airline KLM said. A spokesman declined to put a value on the loss -- but you may assume the worst. The robbers were heavily armed, a source close to the investigation said. The empty truck was later recovered. "KLM security staff were threatened during the heist but no one was injured," an airline spokesman said. Police & airport authorities declined further comment.
***Forward Air Radiated ...... as a large piece of oil well exploring equipment containing radioactive material is now found 4 months after it was imported from Russia by Halliburton Energy Services, the U.S. Nuclear Regulatory Commission reported this month. The shipment containing americium (Am-241) was lost en route to Halliburton's Houston headquarters after arriving by air from Amsterdam & clearing customs at John F. Kennedy Int'l Airport. Halliburton, which contracted with Forward Air Freight for the domestic transport, only reported the missing material Feb. 8, in violation of federal notification requirements. The FBI found the shipment intact at the Forward Air facility in Boston, where it had been trucked after a Boston destination label inadvertently placed on the package at Forward's Newark, N.J., facility. The loss raises questions about whether shipments could fall into hands of terrorists, known to be interested in attacking the U.S. with a "dirty bomb" or weapon of mass destruction. Halliburton blamed the freight forwarder, saying it never informed Halliburton about the missing material despite repeated inquiries, according to Associated Press.
***Borderline Situation ....... as intent on securing the vulnerable Arizona border from illegal immigrant crossings, U.S. officials are bracing for what they call a potential new threat this spring: the Minutemen. Nearly 500 volunteers have already joined the Minuteman Project, anointing themselves civilian border patrol agents determined to stop the immigration flow that routinely, and easily, seeps past federal authorities. They plan to patrol a 40-mile stretch of the S.E. Arizona border throughout April when the tide of immigrants crossing the U.S.-Mexico border peaks. Officials fear the Minuteman patrols could cause more trouble than they prevent. At least some of the volunteers plan to arm themselves during the 24-hour desert patrols. Many are untrained & have little or no experience in confronting illegal border crossings. Officials fear the Minuteman patrols could cause more trouble than they prevent. At least some of the volunteers plan to arm themselves during the 24-hour desert patrols. Many are untrained & have little or no experience in confronting illegal border crossings. Whether by government action or public action, there is a rising tide of sentiment in the Western U.S. to deal with this problem which has almost bankrupted the States of California & Arizona.
2. The Cargo Letter Financial Page ______
**ABX Air, Inc. UP with revenue of US$361.4M and net earnings of US$18.1M, or $0.31 cents per diluted share for 4th quarter 2004. For 4th quarter of 2003, ABX posted revenues of US$274.1M & net earnings of US$7.6M or $0.13 per diluted share.
**Boeing Co. UP with 4th quarter 2004 net income of US$186M on revenues of US$13.3Bn.
**C.H. Robinson Worldwide. UP as net income for Q4 was US$38.6M or 44 cents per share, up from US$27.8M or 32 cents a year earlier.
**Cosco Corp. UP with an 173% increase in net profit in 2004,as net profit reached SGD66.2 million (US$40.6M) in 2004 compared to SGD24.3 million the previous year. Revenues climbed 27%.
**Expeditors Int'l of Washington Inc. UP 4th quarter net earnings incresed 20% to US$43.6M, compared with US$36.4M in same quarter of 2003.
**Forward Air Corp. UP as net income for 4th quarter was US$10.1M or 46 cents per share, compared wth US$7.7M or 35 cents a year earlier.
**Frontline (world's largest tanker shipping co.), UP with 4th-quarter net income to US$498.2M or 14 times the UP$36.7M restated net profit it made in the same quarter of 2003, bringing annual earnings to US$1Bn for 2004, up from a restated US$409.4M in 2003.
**Grupo TMM, S.A. (Mexican multi-modal transportation & logistics) DOWN with a net loss in the 4th quarter after discontinuing operations was US$13.1M in 2004, or $0.23 cents per share, compared to a net loss in 2003 of US$66.3M or $1.16 per share.
**Neptune Orient Lines (NOL) (parent of APL & APL Logistics) UP with a 120% jump in group net profit to new record earnings of US$943M for 2004, as liner shipping delivered another substantial increase in profits.
**Qantas. UP as 1st-half ended Dec. 31, 2004, pre-tax profit of US$471.81M, a 13.4% increase on same period last year.
**Regional Container Lines. UP with record movement of 2.1 million TEU, representing a 21% increase year-on-year as net profit in 2004 leapt more than fourfold to US$95.59M a staggering 481% increase over 2003.
***Ryder System & The Tax Man ..... as it said it would pay US$175M this month to resolve a U.S. Internal Revenue Service tax audit from the years 1998 to 2000. The company said the payment would have no adverse effect on shareholder equity.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ___
***Honeymoon Over? ....... as Airbus 380 will be too big to land at many major airports in the U.S. according to an Associated Press report. The sheer size of the superjumbo could also affect other traffic as it taxis to takeoff and, at the more extreme end, some officials worry the weight of the plane would collapse tunnels & buckle overpasses. While the A380 is not much longer than Boeing's latest 747, currently the world's largest commercial airplane, it is wider & considerably heavier and that is where the problem lies. With a wingspan of 79.5 meters, it is 15 meters wider than the 747 as well as broader than many runways & taxiways. The airplane weighs in at a maximum of 544,320 kilos, 30% more than the biggest 747. The U.S. FAA says just 4 U.S. airports - John F Kennedy in New York, San Francisco, Los Angeles & Miami - are currently working on plans to accept the new plane for passengers, while Anchorage & Memphis are working with the FAA to take the cargo version. Outside the US, airports that are reportedly making necessary preparations for the superjumbo include London's Heathrow, Charles de Gaulle in Paris, Changi Airport in Singapore & Australia's Sydney Airport. And no one mentioned this earlier because?
***Return To Sender ...... as the U.S. Postal Service has stopped using American Airlines & US Airways to deliver domestic mail because the carriers failed to meet performance goals, including on-time delivery. The post office said the suspension took effect Feb. 12 & covers 1st-class mail & some small packages shipped priority class. Airline & post office officials said they were talking & hoped to settle the dispute.
***UPS To Close ...... as it will close the Dayton, Ohio, air-freight hub it acquired when it bought Menlo Worldwide Forwarding in Dec. The facility will close in mid-2006. The decision was a "difficult one and was made after analyzing the significant redundancies" between UPS & Menlo's air-cargo networks, UPS said in its statement. A spokesman said UPS had not yet decided where it would handle "the bulk of the work" handled by Dayton once it closes. UPS said last Oct. when it 1st announced the Menlo acquisition that it would add more overnight & 2-day air shipments of heavier freight. Menlo, which was a unit of CNF Inc., provided heavy airfreight forwarding services, ocean services & Int'l trade management, including customs brokerage. It had US$1.9Bn in gross revenues in 2003.
***UPS To Open Main Heavy Air Freight Hub ....... as a day after announcing plans to close its freight sorting hub in Ohio, shipping giant UPS Inc. announced an US$82.5M expansion at its Louisville air hub, its largest. The world's largest shipping carrier said it will build a 700,000 sq. ft. Worldport Hub at the Louisville air hub to position it as its main heavy airline freight sorting site. The expansion will create 720 new jobs initially. Louisville was among 7 cities contending for the expansion. UPS said Kentucky's incentives package, totaling up to US$20M, helped seal the deal. The incentive package consists of tax credits based on the number of full-time jobs created. UPS said the expansion is expected to create 120 new full-time jobs & 600 part-time jobs at the start of the new operation. Within 10 years, the expansion should create 420 full-time jobs & 720 new jobs to Louisville. The expansion would allow UPS to offer int'l & North American overnight, expedited, 2nd-day and deferred air freight services through its Worldport Hub.
***Remote Control ........ as control towers at some airports could go dark between midnight & 5 a.m. under a cost-cutting plan the U.S. government is considering. The air traffic controllers' union says the move would compromise safety. Senate Commerce Committee Chairman Ted Stevens, R-Alaska, said that if the FAA closes the tower in Fairbanks, Alaska during the early morning hours, it "would be the most stupid suggestion I've ever heard from the bureaucracy." There are 48 airports that handle few commercial and cargo flights in those 5 late-night hours. Federal air traffic controllers staff 315 airports, but not all do it around the clock. For example, control towers at Mansfield Regional Airport in Ohio and at Palm Springs Int'l Airport in California operate for only 17 hours. In addition, there are 193 airports with scheduled commercial service that do not even have control towers. When a tower is empty, pilots are always in voice contact with a controller, either at the Terminal Radar Approach Control or at a center.
***Can United Airlines Be Saved? ...... as it is said to be having little success in attracting financing to exit bankruptcy proceedings which have dragged on for two years, reported The Dallas Morning News. The paper cited United's chairman & CEO Glenn Tilton, blaming the carrier's dire financial predicament on overcapacity in the U.S. airline industry, suggesting that the solution lies in consolidation of the industry. The airline lost US$1.6Bn in 2004. The report claimed that some analysts questioned the sensibility of using mergers to put the nation's airlines firmly back in the black. Industry experts were skeptical that mergers would help airlines lower operating costs or wipe out excess capacity in the market, judging by the failure of past takeover deals to rectify the financial challenges facing the industry.
***Say What? ..... as FedEx Corp. & the largest U.S. pilots union disagree on the use of cockpit voice recordings in employment disputes, the Wall Street Journal reported Feb. 25. The union has accused FedEx of misusing some recordings in disciplinary matters. The arguments between FedEx & the Air Line Pilots Assn. are heating up as federal regulators proposed regulations on gradual installation of longer-lasting recorders. The result of the dispute could make pilots less willing to provide information on future incidents or potential flight hazards.
***Say Hired ...... as UPS will hire another 200 pilots to support its expanding air cargo operations. This brings the total number of UPS's new pilot hires to 300 when combined with the 100 pilot hires announced in Oct. 2004. UPS expects to complete the hiring of these pilots by the end of 2005.
***More China ...... as the U.S. Dept. of Transportation (DOT) has tentatively given UPS & Continental Airlines the go-ahead to expand their air operations to and from China starting next year. The UPS release said the DOT Show Cause Order will grant the company three additional frequencies to serve China. At present, UPS flies 12 times per week from the U.S. to China & will be expanding that number to 18 this year. The latest tentative decision grants UPS 2 new frequencies to Shanghai & 1 new frequency to Guangzhou, effective 2006. With the additional flights, UPS will be offering full 7-day-a-week service to Guangzhou & increasing capacity to Shanghai on the 2 busiest days of the week, Thurs. & Sat. Continental Airlines meanwhile said it has received tentative approval from the DOT to begin service to Beijing from its hub at New York / Newark Liberty Int'l Airport.
***More To Come ....... as the U.S. Dept. of Transportation on Feb. 23 proposed to award new weekly cargo flights to China to 4 air carriers currently serving the U.S.-China market. DOT proposed awarding 3 all-cargo flights each to FedEx Corp., UPS Inc., Northwest Airlines & Polar Air Cargo. They would become available on March 25, 2006, DOT said.
***Private Is Okay ....... as China's aviation regulator is expected to issue a license soon to Okay Airways Co., making it the 1st private airline authorized to operate on the mainland. Okay Airways is based out of Binhai Int'l Airport in Tianjin, a city of 10 million people, 60 miles S.E. of Beijing, although its headquarters is in the capital. After receiving a license from the Civil Aviation Administration of China, Okay Airways was expected to begin services in early March, China Daily reported. China began easing controls on private investment in airlines in early 2004. Earlier reports said Okay would start out operating 6 Boeing 737 aircraft. Okay Airways is expected to mainly operate air cargo & express services, passenger charter flights & ground distribution services. The airline intends to offer low-cost services with greater flexibility than China's larger state-run carriers, the report said. Three other airlines are expected to follow Okay as private carriers: Shanghai-based Spring Int'l Airlines; Eagle Airlines, based in the S.W. city of Chengdu & Huaxia Airlines in N.W. China's Gansu province.
***Air New Zealand Circles The Globe ..... as its cargo unit will launch a dedicated round-the-world freighter service at the end of March 2005, subject to regulatory approvals. The service will use a B747-400 aircraft leased from Atlas Air under a contract that provides the aircraft, crew, maintenance and insurance to Air New Zealand. The schedule will involve a twice weekly operation departing Auckland on Sat. & Tues. and routing Auckland, Melbourne, Shanghai, Frankfurt, Chicago & Auckland. The service replaces a round-the-world MD11 freighter service that was run in partnership with Lufthansa German Airlines.
***FedEx Express In The Center of Japan ....... as it has begun operating regular flights into the Central Japan Int'l Airport as part of its continuing campaign to boost its operation in Asia. A company statement said a FedEx Express MD-11 recently flew to Central Japan Int'l Airport from San Francisco via Narita, to become the first cargo flight to land at the airport. The same aircraft then departed in the evening for Anchorage via Narita, with the 1st load of cargo to be shipped out. FedEx will operate 5 regular flights per week into Central Japan Int'l Airport.
***BA & The Roo OK ...... as the Australian Competition & Consumer Commission (ACCC) has given its nod to the continuation of the joint service agreement (JSA) between British Airways & Qantas, for a further 5 years. Despite Virgin Atlantic's objections, the ACCC confirmed its draft findings that the JSA was pro-competitive. The alliance was 1st approved in 1995, and was last extended in March 2000
***Rutges Cargo To 2000 ...... as the Amsterdam-based air cargo trucking company, has joined the Int'l Air Transport Assoc. special interest group Cargo 2000. Rutges Cargo is a wholly owned subsidiary of the Wim Bosman European logistics group. IATA set up Cargo 2000 in 1997, with the aim of setting new standards for the air cargo industry. By reducing the number of individual processes in the air cargo supply chain from 40 to 19, Cargo 2000 offers a less labor intensive and improves the processes for managing shipments in a paperless environment. It also reduces time spent managing irregularities & cuts the time required for manual track & trace procedures.
***American Airlines Southern Focus ........ as the AA Cargo division has recently begun offering online booking services to customers in Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua & Panama, granting them access to the airline's global air freight network. Customers are able to search for cargo capacity, choose a flight, & book shipments.
***Boeing Sells 737 Fuselage ....... as it will sell the Wichita/Tulsa division of Boeing Commercial Airplanes to Canadian firm Onex Corp. for US$900M cash & transfer of some assets and liabilities. The Wichita division produces the fuselage for the 737 series of aircraft & structures for most Boeing commercial aircraft, S&P said. Many of these Boeing planes are used to move air cargo.
***Factory For The Mother Ships ...... as Boeing has selected Taiwan's Evergreen Aviation Technologies Corp. (EGAT) to convert three 747-400 passenger jets into cargo freighters that will be used to transport major pieces of the all-new Boeing 787 Dreamliner. A joint statement said that a formal modification services agreement for an undisclosed amount was recently signed in Taipei by representatives from Boeing, EGAT and Eva Air. EGAT is a joint venture between EVA Air & General Electric. Boeing has 191 announced firm orders for the 787 from 15 airlines, the release said.
***Aviation Obsessives ....... as cameras & Internet connections have become a threat to cover stories established by the CIA to mask its undercover operations and personnel overseas. U.S. intel sources complain that "plane spotters" -- hobbyists who photograph airplanes landing or departing local airports & post the pix on the Internet-made it possible for CIA critics recently to assemble details of a clandestine transport system the agency set up to secretly move cargo & people-including terrorist suspects-around the world. Google searches revealed that plane spotters Web-posted numerous photos of two private aircraft-one a small Gulfstream jet and the other a midsize Boeing 737-registered to obscure companies suspected of CIA connections. Some of the pictures were taken at airports in foreign countries where CIA activities could be controversial. When the 737 last year went through a change of tail number and ownership -- a suspicious company in Boston apparently transferred the plane to a similar company in Reno, Nev. -- Internet searches of aviation data-bases disclosed details of the plane's new owners and registration number. One critical database, accessible via Google, was a central aircraft registry maintained by the government's own FAA. A U.S. intel source acknowledged that the instant availability of such data & photos on the Internet is not helpful "if your object is clandestinity." (To see how it works, check the Web for info on a business jet carrying the Liechtenstein tail number "HB-IES." The search should turn up pictures of that plane at a European airport, as well as records describing the plane, registered to a company called Aviatrans, which once belonged to Saddam Hussein.) Agency officials and lawyers have discussed the possibility of changing U.S. laws & regulations to make it easier for the agency to hide its activities. That may be difficult, so for now, plane spotters can keep their eyes on the CIA.
***It's For Your Carry-On Stupid ...... as British rock star Ozzy Osbourne's son Jack had jewelry worth US$382,000 stolen from a suitcase during a flight from Los Angeles to London, the Sun newspaper reported on Feb. 24. The valuables, which included 2 watches, were probably stolen from the case before it was put in the cargo hold for the flight. Nice watches.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs ____________
***The Company You Keep ........ as the U.S. Federal Maritime Commission said it would deny petitions filed by 2 shippers' associations calling for the agency to reconsider its recent non-vessel-operating common carrier service arrangement rulemaking. The rule, which became effective Jan. 19, excluded shippers' associations with NVO members and individual NVOs from entering service arrangements with NVOs. The FMC cited concerns about antitrust violations if NVOs should be allowed to enter service arrangements with other NVOs. The American Institute for Shippers' Associations and the Int'l Shippers' Assn. claimed in their petitions that during the rulemaking process the FMC failed to consider their arguments; acted beyond its statutory authority in making the rule; failed to adequately determine the rule's potential effects on competition between large & small NVOs; and improperly regulated the members of shippers' associations. in addition, the FMC rejected the Aug. 8, 2003, petition filed by the National Customs Brokers & Forwarders Assn. of America requesting the FMC initiate rule to exempt NVOs from publishing tariffs
***No Thanks ...... as Malaysia does not want help from outside the region in patrolling one of the world's most strategic waterways - the Strait of Malacca - a government minister said Feb. 25, despite a recent rise in pirate attacks there. Officials are "quite happy" with security in the strait, a trade & oil shipping lane between Malaysia & Indonesia's Sumatra island, said Foreign Minister Syed Hamid Albar. "I don't think there should be any intervention from outside parties,"Syed Hamid told reporters." The minister was commenting on an Int'l Maritime Bureau report that 37 pirate attacks occurred in the waterway last year, up from 28 in 2003. The U.S. & Singapore have warned that the strait could also be vulnerable to a terrorist attack. Last March, Adm. Thomas Fargo, commander of U.S. forces in the Pacific, said an American plan to heighten security in the waterway might require a detachment of elite U.S. troops to be stationed nearby. Malaysia & Indonesia, both predominantly Muslim, rejected the U.S. plan. But it was embraced by Singapore, a strong U.S. ally in the region. Most of the pirate attacks involved vessels being fired on & crew kidnapped for ransom -- 36 seafarers were abducted in the strait last year; 4 were murdered & 3 injured. The pirates struck despite Malaysia, Indonesia & Singapore launching coordinated naval patrols in the 550-mile route, which is used by 50,000 ships each year. Over all, the annual piracy report cited 30 crew deaths in 2004, compared to 21 in 2003. There were 28 reported pirate attacks in Nigerian waters in 2004 down from 39 in 2003.
***Money For Where The Terrorists Aren't ...... as a report by the Dept. of Homeland Security's inspector general said the department did not award U.S. ports security grants based on their potential as terrorist targets, the New York Times reported. Although there are 360 public and private ports in the U.S., about 80% of trade moves through just 10 ports, the Times said in a front-page story. The New York Times said the audit found that part of the problem was that grants were made to individual ports even when they lacked merit and that the money was being spread too widely without adequate concern to high-volume, high-profile ports. One DHS official defended the grants program but said it would adopt some of the report's recommendations to move more funding to high-risk ports. Officials at heavily used ports in California & New York expressed frustration at the uneven funding levels, the Times said. California Sen. Dianne Feinstein (D) wrote DHS saying that the department needed to allocate more funds to California's busy ports of Los Angeles, Long Beach & Oakland, it said. Sen. Frank Lautenberg (D-N.J.) wrote a similar letter to President Bush, the Times said. The Port Authority of New York & New Jersey received US$6.2M, or just 1% of the total grants given in the port-security financing program.
***Hollywood Bottleneck To Continue ....... as senior executives of APL & the Transpacific Stabilization Agreement carrier group said they expect severe congestion problems on the U.S. West Coast to continue in the medium term, despite efforts by shipping lines and shippers to look for alternative port gateways and tentative plans to build new terminals. On one day at the height of the peak transpacific shipping season, a record 94 ships were in Los Angeles-Long Beach harbor concurrently, of which 33% were containerships waiting at anchor to berth. Nearly 70% of total Asia/U.S. container traffic arrives on the West Coast, and most of that volume moves through Los Angeles & Long Beach. In 2004, carriers & shippers diverted some ships and cargoes to Pacific Northwest ports & Oakland, with the result that port volume growth slowed to 11% in 2004 to 13.1 million TEUs, compared to a growth of 18% recorded for 2003.
***But The Hollywod Surcharge Is Suspended ........ as the Trans-Atlantic Conference Agreement has suspended its Los Angeles/Long Beach port congestion surcharge of US$200 per TEU, but warned that it may have to reinstate the surcharge later. TACA said it may reinstate the congestion surcharge on or after April 1, depending on port circumstances at that time.
***Korea's Huge Order ....... as shipbuilder Hyundai Heavy Industries said its backlog of vessel orders has reached 240 ships, for an aggregate contract value of US$17Bn, as shipowners continue to place orders for new ships. Following a surge of large-scale orders secured in January, Hyundai received orders for another 20 ships in Feb, worth US$1.9Bn. The Feb. orders include four 8,600-TEU containerships & five 4,700-TEU vessels for Hyundai Merchant Marine, three 6,500-TEU containerships for Hanjin Shipping, four 4,900-TEU boxships for Islamic Republic of Iran Shipping Lines, and 4 liquefied petroleum gas carriers for a European shipowner. Hyundai has also recently received an order from COSCO to build the 1st 10,000-TEU containerships.
****Sino Shipbuilding Moves To Front ....... as China produced vessels with a total tonnage of 8.5 million tons in 2004, meaning the nation continues to be ranked 3rd in the world behind ship manufacturers in South Korea & Japan, reported Xinhua. The news agency said China's shipbuilding industry made up 15% of the Int'l market, and that new and existing orders for newbuilds accounted for 17% of the industry's combined tonnage in 2004. A report from the People's Daily Online said that the nation's largest shipbuilder, China Shipbuilding Industry Corp. (CSIC) received orders for new ships with a combined tonnage of 6 million tons in 2004, placing the company in the top spot among domestic shipbuilders. CSIC was said to have produced new vessels with a total tonnage of 2.14 million tons last year, a 30% increase over the previous year.
***Transpacific Stabilization Agreement Up ....... as the carrier group has predicted the eastbound Asia-to-U.S. trade will expand 10% to 12% this year, after growing nearly 15% in 2004. Following Maersk Sealand's withdrawal from the TSA, the market share of the transpacific carrier group has dropped below 50%, according to the Hong Kong Shippers' Council. TSA said in November its carriers recommend May 1 rate increases of US$285 per 40-foot container for Asia-to-U.S. West Coast shipments & US$430 per 40-footer for all-water shipments to the U.S. East Coast and Gulf ports. TSA members are: APL; "K" Line; CMA CGM; MOL; Cosco; NYK Line; Evergreen Marine; OOCL; Hanjin; P&O Nedlloyd; Hapag Lloyd Container Linie; Yangming Marine Transport Corp; & HMM.
***Welcome? ......... as the Japanese government has issued permission for 16 North Korean cargo ships to call at Japanese ports under a new insurance law that will take effect March 1. Nine vessels are general freighters, & 7 refrigerator ships for marine products. What kind of insurance is this?
***St. Lawrence Seaway Sees Its Shadow ....... as it will officially open to commercial ships on March 25 after shutting down for the winter, said the organization that owns & operates the two U.S. locks on the waterway in New York. The St. Lawrence Seaway Development Corp. said winter maintenance on the locks will be completed in time for the world's longest waterway to open for business. The waterway is the crucial commercial artery for U.S. States on the Great Lakes & the Canadian provinces of Ontario & Quebec. The opening date varies each year.
***No Waiting -- Or It Costs! ........ as terminals & railroads in North America will tighten container free time & possibly increase demurrage rates this year to maximize the use of existing space in their facilities, Maersk Sealand warned shippers in a customer advisory. Referring to the widespread terminal congestion, rail and truck delays and equipment shortages experienced in 2004, Maersk Sealand said an expected 11-percent growth in container volumes this year points to "an even greater strain" on landside transportation assets. "In response to this, we expect marine terminals and rail service providers will take measures to improve the flow of equipment through their facilities," the Danish shipping line said. They will reduce free time & raise demurrage costs. Maersk Sealand cited several initiatives already taken in this area. Beginning March 15, Maher Terminals in the port of Newark will introduce a tiered demurrage fee structure that increases fees as equipment remains in demurrage, Maersk reported. In addition, effective May 1, Maher will cut free time from five to four days for dry cargo. Similarly, the Burlington Northern Santa Fe railroad will change its free time & demurrage charges at its U.S. rail ramps. Effective May 1, BNSF will calculate free time in calendar days, including Saturdays & Sundays, where previously the 1st weekend was excluded. In addition, it will raise demurrage fees.
***Matson Navigation Co. Expands Paradise ....... as it intends to invest US$365M in vessel, container & terminal assets to launch a new Guam and China service beginning in Feb. 2006 when its present ten-year alliance agreement expires with APL. As a key element of that plan, the company has entered into cash on delivery purchase contracts for two new U.S.-built containerships with Kvaerner Philadelphia Shipyard, Inc. (KPSI). The vessels to be acquired will be similar in capacity, speed & operating efficiency to Matson's M/V Manukai & M/V Maunawili, both built by the same yard and placed in service in 2003 & 2004, respectively. The 2 new ships are expected to be delivered and placed in service by July 2005 and June 2006 at an estimated combined cost of US$315M. By mid-2006, both new ships will be deployed in an integrated weekly West Coast-Hawaii-Guam-China service together with 3 of Matson's most efficient diesel-powered containerships.
***Tsunami Disaster Very Heavy, But Not Deep ........ as the Dec. 26 2004 tragedy altered the depth of the sea by more than 30 feet but not enough to interfere with shipping in vital areas as initially feared.
***Ditch Toll ........ as the Republic of Panama's cabinet council approved the Panama Canal Authority's controversial recommendation for a new measurement system and large toll price increases for full container vessels & other vessel types with on-deck container carrying capacity. Under the proposal, fully cellular containerships will be charged based on container carrying capacity, replacing the current "Panama Canal/Universal Measurement System" (PC/UMS) tonnage. Representatives of the Int'l shipping industry, including London-based Int'l Chamber of Shipping and the Washington-based World Shipping Council, oppose the proposal saying it would represent a 68.75% increase over current toll charges. The proposed toll will be implemented over 3 years as follows:
* $42 per TEU, from May 1, 2005.
* $49 per TEU, from Jan. 1, 2006.
* $54 per TEU, from Jan. 1, 2007.
***Coastwise May Be Wise ....... as U.K.-based MacAndrews has completed initial trials of shipping fresh produce in 45-foot high-cube "pallet-wide" reefer containers from Spain to the UK & Ireland by sea, as an alternative to trucking. The trials included shipments of lettuce, broccoli, citrus, apples, pears, mandarins, lemons and onions. MacAndrews said the trials showed a successful outturn quality of the products moving from Iberia in reefer containers, when compared to over-the-road trucking. MacAndrews noted that shipping is more friendly to the environment than road transport.
***Odyssey Marine Exploration Has The Coin ....... as the deep ocean shipwreck exploration company has concluded current operations on the SS Republic shipwreck site in the Atlantic. The company's 251' deep ocean archaeological platform, the Odyssey Explorer, is now en route to the western Mediterranean to begin operations shortly after arrival. SS Republic was a paddlewheel steamer that sank during a hurricane in 1865 while en route from New York to New Orleans with post-war supplies & currency. Odyssey Marine Exploration discovered the shipwreck in Aug. 2003 nearly 1700 feet below the Atlantic. Shortly after commencement of the archaeological excavation, a substantial number of gold coins were revealed . More than 51,000 coins have been recovered including US$20.00 Double Eagles, US$10.00 Eagles, Half Dollars and a few Quarter Dollars. The retail value of coins recovered to date is expected to exceed US$75M.
***M/V MSC Diego Spanked ..... as she was cited in 2002 for illegally anchoring in the U.S. National Marine Sanctuary, near Key West. Biologists said its anchor and chain overturned more than 1,000 coral colonies and crushed others in an area about the size of an Olympic-sized swimming pool. Mediterranean Shipping Co. and its insurer will reimburse the government US$100,000 for damage & related costs, the National Oceanic & Atmospheric Administration said. The companies will also pay US$465,796 to monitor and restore the reef. The sanctuary covers 2,900 square nautical miles of coral reefs, seagrass meadows & shorelines.
***FMC Revokes Licenses ......... as revoked are 4 OTI licenses for failure to maintain valid bonds: CSI Cargo System Air and Sea in Jamaica, N.Y.; Godwin Shipping Co. of Mobile, Ala.; Uniworld Cargo Shipping Lines, North Bergen, N.J.; & Worldserv Transport Corp. of Garden Grove, Calif.
***Throughput >>> Port of Boston has reported cargo volumes grew by 11% in 2004 compared to the previous year to 175,069 TEU, with imports up 12% year-on-year to 83,925 TEU and exports rising 15% over 2003's freight level to 53,083 TEU. >>> Chiwan Container Terminal (CCT) in Shenzhen handled 364,000 TEU in January this year, an increase of 47.3% compared with the same month the previous year. >>> Hong Kong container throughput in Jan. 2005 reached 1.86 million TEU, a 7.8% rise over same month in 2004. >>> Port of Long Beach has continued to record growth in its box traffic, with a 35% jump in volumes to 509,597 TEUs in Jan. >>> Port of Los Angeles which is easing out of a major congestion problem, handled 590,178 TEU in the 1st month of 2005, 4.21% down on January 2004's throughput. >>> Port of Seattle handled a record 1.8 million TEU in 2004, a 20% increase over 2003 -- confirming its higher volume growth when compared to the heavily congested ports of Southern California. >>> Port of Tacoma reported a 3% increase in its box traffic for 2004, to 1.8 million TEUs in 2004, including domestic cargo to/from Alaska & Hawaii.
***This Month in U.S. Navy History ...........
1844 - The Peacemaker, an experimental 14-inch gun, explodes aboard USS Princeton.
1861 - Saratoga, a member of the U.S. African Squadron, captures the slaver sloop Express.
1893 - USS Indiana (BB 1), the 1st true battleship in the U.S. Navy, is launched.
1909 - The "Great White Fleet" returns to Hampton Roads, Va., from its historic around-the-world cruise.
1933 - USS Ranger (CV 4), the 1st true aircraft carrier, is commissioned.
1945 - U.S. Marines & a Navy corpsman raise American flag on Mt. Suribachi, Iwo Jima -- forever remembered on U.S. Marine Corps War Memorial in Washington, D.C.
1959 - USS Strong (DD 758) rescues 13 Arab fishermen from Bahrain when their fishing boats flounder in a storm.
1980 - The blue crew of USS Francis Scott Key (SSBN 657) launches four Trident I (C-4) missiles in the 1st C-4 operational test.
1991 - Forces from the United States, United Kingdom, France, Saudi Arabia, United Arab Emirates, Bahrain, Qatar, Oman, Egypt, Syria and Kuwait proceed with major ground, air & naval offensive to drive Iraq out of Kuwait.
5. The Cargo Letter Cargo Damage Dispatches
**Back By Popular Demand**
We're sorry, but there were so many sinkings, explosions, pirate attacks, fires, cargo mishaps, battles on the water & other disasters at sea that we do not have room to print even the highlights this month. Many people lost their lives at sea this month!!
But you can read all this month's disaster news at our special Internet web feature which provides full details of each event -- our Vessel Casualties & Pirate Activity Database. Bookmark the site and visit every day! Updated twice daily.
SPECIAL NOTE: Please view the dramatic new pictures at our special "Gallery of Cargo Loss" website feature.
See our new photo feature for Feb. 2005: "One Brick Short of A Runway"
See our newest photo feature "Singles Only" - Transportation Disasters Told In A Single Photo!
NOTE: The historic dangers of carriage by sea continue to be quite real. Shippers must be encouraged to purchase high quality marine cargo insurance from their freight forwarder or customs broker. It's dangerous out there.
OUR "D" Section: FF in Cyberspace***
6. The Cargo Letter "Cyber Ports Of Call"
Here are our suggested world wide web sites of the week for your business, your information and your amusement..............
Aeronautics Research Mission Directorate
CIO Resource Center
e-NOA/D User Guide .........U.S. Coast Guard National Vessel Movement Center (NVMC) guide. Proper notices of arrival/departure will satisfy USCG & Customs & Border Protection (CBP) new 96-hour reporting requirements.
EU Measures on Wood Packaging Imports
Federal Maritime Commission (FMC) ..... amended its regulations to reflect recent reorganization.
Financial Advantages of A Lean Supply Chain
Hong Kong Marine Dept. Best Practices For Container Handling
Invitation to Steal ...... the more automated critical processes, the more vigilant you need to be about protecting against fraud.
Material Handling Product News or Feb. 2005
NASA Advanced Air Transportation Technologies Project Is Complete ......... after 9 years.
Plan To Dredge Port of Baltimore
U.S. Customs Rulings On-line Search System (CROSS)
U.S. Customs Rulings
USDA Wood Packing Materials
What's Next For RFID?
2005 Truck Drivers Safety Handbook
PIERS ....... launched by The Journal of Commerce 30 years ago as its 1st venture in electronic information, a primary source of U.S. waterborne import-export trade data & solutions.
PeopleNet g3 ......fleet productivity solutions.
World Trade Organization Events
7th eyefortransport North American Technology Forum .......... April 25-26 in Chicago.
14th Annual Int'l Air Cargo Conference & Exhibit- Houston 2005........17 to 19 May, 2005 (National Transportation Week). At IACC- Houston 2005.
Forward Air Corp. Presentation At Deutsche Bank Global Transportation Conference in Naples, Florida. ......... Wed, Feb. 16, 2005 at approximately 10:15 a.m. EST. Interested parties may listen to the presentation via a live Internet webcast.
Int'l Air Cargo Assn. (TIACA) ....... April 10-12 2005 -- Annual General Meeting & Expo -- Istanbul
Los Angeles Harbor Transportation Club 66th Annual Officer Installation Gala & Casino Night Fund Raiser ...... March 5, aboard the Historic Queen Mary
Navigate Transportation's Perfect Storm ..........March 16, 2 pm EST Webcast
Sea Cargo Americas ........ May 11 & 12 2005, Miami.
Supply-Chain World-North America 2005 Conference & Exposition ......... April 4-6, 2005, Disneyland Hotel, Anaheim, California USA
Twin Cities Chapter of the Council of Logistics Management Annual Conference........ March 4, 2005 in Minneapolis, MN, Airport Marriott, Bloomington, MN
U.S. Bureau of Customs and Border Protection Customs-Trade Partnership Against Terrorism (C-TPAT) Supply Chain Security Training Seminar .......... "Supply Chain Security in a New Business Environment," Miami, Florida, April 18-21, 2005. C-TPAT members only. Free.
Warehouse Management For Midsize Companies .......... March 23, 2005, 9:00 a.m. Pacific, 12:00 p.m. EST - webcast
Behold: It's Mr. Inferno
In Case of Avalanche During Road Transit
UPS Racing ........ race the brown truck.
The Planeboat & Howard Hughes
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _______
Stewart v. Dutra Construction Co.
United States Supreme Court
Feb. 22, 2005 No. 03-814
ADMIRALTY -- The Court unanimously held (opinion by Thomas; Rehnquist taking no part) that a dredge is a vessel for the purposes of the Longshore & Harbor Worker's Compensation Act (LHWCA). Dutra Construction Co. (Dutra) was hired by the Commonwealth of Massachusetts to dredge a trench beneath Boston Harbor as part of the "Big Dig" turnpike project. Dutra employed Stewart as an engineer to maintain equipment on Dutra's dredge, the Super Scoop. Stewart was injured when the Super Scoop collided with one of its scows. Stewart sued Dutra, alleging claims under the Jones Act and the LHWCA. Dutra was granted summary judgment on Stewart's Jones Act claim, a ruling affirmed by the U.S. Court of Appeals for the 1st Circuit (Court of Appeals). On remand, the U.S. District Court for the District of Massachusetts (District Court) granted summary judgment in favor of Dutra on the LHWCA claim. Though, Dutra had conceded that the definition of vessel was broader under LHWCA than under the Jones Act, and thus a dredge was a vessel for the purposes of LHWCA, the Court of Appeals affirmed the summary judgment order. The United States Supreme Court (the Court) reversed & remanded, finding it necessary to resolve the confusion surrounding the definition of 'vessel.' The Court held that a dredge is a vessel for the purposes of the LHWCA. The Court noted that although Congress had neglected to define the term 'vessel' in the LHWCA, it had previously defined the term in an 1873 statute intending to apply the definition to all subsequent enactments of Congress using the term. That definition has since become the default definition through the U.S. Code. The Court found that several cases since the enactment of that statute interpreted the definition to include dredges. Read the decision.
Re: In The Matter of Superior Boat Works
U.S. 5th Circuit Court of Appeals
Feb. 16, 2005 No. 04-60296
In an unpublished decision, the Court ruled that a gaming vessel is tangible personal property for purposes of Mississippi tax law. In the instant case, a shipyard converted a barge into a gaming vessel. After the work was completed and the shipyard was paid, the shipyard filed for bankruptcy under Chapter 11 of the Bankruptcy Code. The Mississippi State Tax Commission asserted that taxes should be paid on monies received for work on the gaming vessel. Under Mississippi law, taxes are due on a percentage of monies earned with certain exceptions. One of the exceptions relates to constructing, repairing, or adding to personal property. The district court held that, since the gaming vessel was permanently moored, it became an extension of the land and, thus, the work was taxable. The appellate court reversed, ruling that the gaming vessel did not lose its identity as tangible personal property when it was permanently moored. Read the decision
Florida Dept. of Revenue Vs. New Sea Escape Cruises
State of Florida Supreme Court
Feb.17, 2005 No. SC02-2013
Court ruled that a ship engaged in a cruise to nowhere outside state waters is not engaged in intrastate commerce for purposes of taxation under Florida law. In the instant case, the respondent operated a gaming ship from a Florida port. Passengers were taken outside the 3 mile limit before being allowed to gamble (i.e., relieved of their money). The Florida Department of Revenue contended that, because the ship did not transit to a foreign port, the entire voyage was intrastate and taxes were due on all revenue earned. The court held that the term "intrastate" means, for this purpose, a voyage within state waters out to 3 nautical miles from shore. There are implications for cargo cases here.
Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News, Lloyds & other world sources.
The Cargo Letter Correspondents:
Michael S. McDaniel Esq, Editor (Countryman & McDaniel)
David Schuchman -- Interpool Corp. -- Webmaster of The Cargo Letter Archive
Libby Thompson (Countryman & McDaniel)
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