Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
31 Jan. 2006
Good Tuesday 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 our industry review for January 2006.
We are often asked whether Countryman & McDaniel, conducts training seminars. Yes, from multiple Fortune 100 companies, to smaller forwarders, to the U.S. government, to insurance companies -- for years we have conducted inovative programs for domestic & Int'l claims, Customs, security, trade compliance & post 9/11 industry business practice. McD
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Our corporate sponsor &endash;- Interpool, Inc. -- named again to Forbes "Best 200 Small Companies" List -- for the 2nd consecutive year! -- http://www.interpool.com/Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker/trade consultant attorneys at LAX.
INDEX to The Cargo Letter:
OUR "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 _____________
***The Cargo Letter Website ....... as you read The Cargo Letter each month, but some of you still are unaware of our many other features & popularity on the Internet. For the month of Jan. 2006 through Jan. 30, we have received 3,202,619 hits, with a daily average of 103,310 hits, to a maximum of 164,722 hits per day. Our Website was started in 1994 and with over 3 million hits per month has traffic which exceeds most all shipping industry efforts on the Internet. Many readers visit evey day to review such features as our "Daily Vessel Casualties." Of the hundreds of features we offer, associate editor Libby Thompson has just updated our "Transportation Games Arcade" & the "Maritime History Center" -- both are examples of our hundred of features for you to enjoy. Surely, part of our Internet traffic growth is due to an amazing response to our continuing photo coverage of the grounded container vessel M/V APL Panama -- literally sitting inland at Ensenada, Mexico. You have NEVER seen anything quite like this. Take a look today!
***Slower Growth ...... as the U.S. economy slowed its growth in the fourth quarter to a 1.1% annual rate, the Commerce Dept. reported Jan. 27. The gross domestic product growth rate followed a 4.1% 4th-quarter annual rate, and the slowed growth ended 10 consecutive quarters of growth exceeding 3%. That had been the longest such string since the 13 quarters that ended in the first quarter of 1986. Economists had expected a 2.8% rate for the quarter, Bloomberg reported. A drop in automobile sales in October following the big hurricanes and rising fuel costs contributed to the downturn, Bloomberg said. For all of 2005, the economy grew at 3.5%, following 4.2% growth in 2004. The Wall Street Journal reported in early Jan. that the 2006 GDP will grow at a 3.5% in the 1st half and 3.1% in the 2nd half of the year.
***Supply Chain Vulnerability? ....... as businesses' reliance on just-in-time inventories could make the United States' supply chain vulnerable if there were a pandemic outbreak of avian flu, the Wall Street Journal reported on Jan. 12. Companies from auto plants to hospitals generally keep 30 days' supply of inventory on hand, in part to trim costs, the Journal said in a front-page story. The result in any possible flu pandemic could be that factories would have to close because of lack of workers, and there would be shortages of important medicines &emdash; aside from what is needed for any flu outbreak itself, the paper reported. President Bush has promised to spend US$2.8Bn to help jump-start new flu vaccine development programs, the paper said.
***Battling The Other Pirates ........ as the Int'l Chamber of Commerce's Business Action to Stop Counterfeiting & Piracy urged the European Commission in a letter last week to carry out new initiatives to crack down on production of counterfeit merchandise. The group warned that without piracy protections, the European Union's competitiveness in the global market would weaken. "Unfair competition from counterfeiting & piracy worldwide drains billions annually from the 'virtuous circle' of economic growth that intellectual property generates, and costs the EU more than 100,000 in lost jobs," the group's letter said.
***Ukraine In For GSP ....... as the Bush administration has reinstated the Ukraine in its duty-free program for certain imports from developing countries. The U.S. removed Ukraine from the program, known as the Generalized System of Preferences or GSP, in August 2001 after finding extensive pirating of optical media products, such as CDs & DVDs. In 2002, the United States imposed 100 percent tariff sanctions on US$75M worth of Ukranian exports. In 2005, the Ukrainian government passed legislation to crack down on intellectual property rights violations (IPR).
***Liberia Could Be Next ....... as the Bush administration will consider whether to re-designate Liberia as a least developed country under the Generalized System of Preferences (GSP) program. Liberia's GSP eligibility was suspended on May 1, 1990, after a review by the Office of the U.S. Trade Representative determined that Liberia failed to recognize international worker rights. Under GSP, the U.S. provides duty-free treatment on certain imported goods from eligible countries.
***Cash Cow In Year of The Dog ...... as with growth of 34% in 2005, China's foreign currency reserves have reached a record level at US$819Bn.
***U.S. Beef Returns To South China Sea ..... as the governments of Hong Kong & Taiwan government will reopen their borders to U.S. beef shipments. Like many countries, Hong Kong & Taiwan banned U.S. beef imports after the U.S. Dept. of Agriculture announced a case of bovine spongiform encephalopathy, or "mad cow" disease, in a Washington state cow in late Dec, 2003. In 2003, the U.S.shipped $90M worth of beef products to Hong Kong, making it the 5th largest overseas market for U.S. beef. In 2003, the U.S. exported more than US$76M worth of beef to Taiwan, with boneless beef products accounting for $56M. Under its new agreement, the United States may export boneless beef from cattle less than 30 months of age to both countries under the Beef Export Verification Program. Since the closing of many U.S. export markets 2 years ago, the U.S. has recovered access to markets valued at more than $2.8Bn, or 74% of the 2003 export value of $3.9Bn. Other Asian countries to resume trade in U.S. beef are Japan & South Korea.
***But Not So Fast, Says Japan ........ as the U.S. government admitted Jan. 20 that a shipment of beef to Japan contained cattle parts that are banned under an agreement reached last month to end a two-year ban on U.S. beef imports because of fears of "mad cow" disease. The Dept. of Agriculture said it is taking action against the processing plant & inspector who handled the shipment and stepping up inspections. Japanese Prime Minister Junichero Koizumi earlier said he will order a halt to beef imports from the U.S., based on recommendations from the Ministry of Agriculture, which reported that inspectors at Narita Int'l Airport found pieces of cattle backbone in a shipment. The agreement excluded spines, brains, bone marrow & other parts of the cow thought to be at higher risk for bovine spongiform encephalopathy (BSE), a brain-wasting disease.
***Hot Commodity ...... as the U.S. Dept. of Agriculture has proposed to amend its regulations to allow imports of South Korean-produced peppers. Under the proposed rules, the peppers would have to be grown in approved insect-proof greenhouses & packed in pest-free packinghouses in South Korea. If the regulations are approved, South Korea expects to export about 250 metric tons of peppers a month, or about 600 40-foot refrigerated container loads a year. Last year, the U.S. imported about 446 million kilos of peppers, valued at US$663.6M. Mexico, Canada, the Netherlands, & Israel were the major exporting countries.
***The Worm Ships Separately ........ as U.S. trade officials have reached an agreement with Mexico to continue receiving imports of bulk Mexican tequila for bottling in the U.S. In 2003, Mexico considered amending its tequila standards to require its bottling in Mexico. The amendment, in effect, would have banned bulk exports of the liquor.
***Supply Chain Derby ....... as AMR Research has published its Supply Chain Top 25, a list exemplifying the very best in supply chain supplier practices. Dell took tops spot for 2nd year in a row. The top three performers are Proctor & Gamble, in the 2nd position, followed by IBM in 3rd. Both companies moved up a notch from the previous year's rankings. Nokia fell 2 slots to 4th in 2005, while Toyota Motor moves into the 5th spot from 6th last year.
***Smoother Mexican Rails? ....... as Kansas City Southern de Mexico has implemented a number of changes leading to more efficient transit times across the U.S.-Mexican border, according to the Assn. of American Railroads (AAR). The AAR said that a focus of these cross-border changes is the Sanchez Yard, located south of Nuevo Laredo in Mexico, the principal inspection & switching yard for southbound moves into Mexico. Efficiency changes have targeted procedures that caused congestion in the yard and on the Int'l Bridge at Laredo, the association said. Previously, Mexican Customs restricted inspections of imports to 2 tracks inside Sanchez Yard, necessitating additional yard switching. Also, because Mexican Customs had only one inspector shift per day, a limited number of cars could be cleared during the shift, increasing dwell time & causing congestion in the yard. The AAR said, however, that since Dec. 2005, Mexican Customs has been inspecting imports on nearly all Sanchez Yard tracks without the need to separate the existing trains, and a 2nd inspection shift was added. The AAR noted that Mexican Customs this month is implementing a new railroad control system that will reduce processing time through the use of a uniform identification number, resulting in the arrival of fewer undocumented export cars to Nuevo Laredo.
***CSX Transportation Returns To Big Easy ....... as it will resume its local Gulf Coast freight rail service to New Orleans early in Feb. Over the past 5 months, the Jacksonville, Fla.-based company has restored to the Gulf region 6 major bridges, more than 40 miles of track, & its major rail yard in New Orleans.
***Dire Prediction For Motor Truck Cargo Rates ....... as the United States economy is headed for a severe recession within 18 months, and when it finally rebounds shippers will end up paying much higher rates for trucking because the contracted industry fleet will be unable to meet demand, predicted Noel L. Perry, the chief economist at giant motor carrier Schneider National. Perry spoke at at the Transportation Research Board's annual conference in Washington where he forecast that the nation will soon experience its "worst recession since 1983," adding in response to questioning that he would even put down money on the likelihood of a severe downturn in the economy. Capacity in the U.S. truckload market has been tight for the past few years as carriers have been more judicious in expanding fleet size to focus on profitability, even as a strong economy and rising imports have pushed up demand for trucks to move goods. As business falls off, trucking companies will layoff workers and stop replenishing the 12% to 20% of their fleet that they normally use up each year. Perry predicted that in 2009 the pendulum will have drastically swung from trucking companies and drivers being the victims of market conditions to shippers as victims "because they will have to pay economic rent" for access to trucks.
***U.S. Domestic Yearly Surface Volume Grows ....... as in its most current reported figures, the U.S. Government Census Bureau says that truck transportation, couriers & messengers, warehousing and storage showed a US$20Bn increase from 2003 to 2004. Truck transportation alone grew to US$186Bn in 2004, which was up 10.4% year over year. General freight trucking contributed almost 66% of all trucking revenues, accounting for US$125Bn for the year. Courier & messenger revenue reached US$62Bn, up 4.0%. Hazardous materials shipments garnered US$10Bn, a 9.4% jump.
***U.S. Domestic Monthly Surface Volume Declines ....... as the American Trucking Associations' advanced seasonally adjusted for-hire Truck Tonnage Index dropped 3.0% in Dec. as auto makers trimmed production. December's reduction, which followed a 2.3% gain in Nov., marks the 1st tonnage decline since Aug. and represents the largest monthly contraction of 2005. On a seasonally adjusted basis, the tonnage index fell to 113.3 (2000=100) from 116.9 in Nov. On a not-seasonally adjusted basis, the tonnage index contracted by 8.1% from Nov. to 106.2. Despite the monthly decline, the Dec. tonnage index stands 0.6% higher than a year earlier. For all of 2005, the index increased 2.0% compared with 2004.
***Goodbye YellowRoadway Corp. ....... as the company will now be known as YRC Worldwide Inc. and is is the parent company of YRC Regional Transportation, which comprises New Penn Motor Express and the USF companies, USF Holland, USF Reddaway, USF Bestway & USF Glen Moore.
***Biggest Ever U.S. Facility For DHL ........ as construction of the 161,125 square foot New York City facility will begin next month and is scheduled to be fully operational in May. The US$181M investment will consolidate two of DHL's present locations into one to serve for pickup, delivery and sorting of shipments in Manhattan. It is sited to take advantage of below-grade rapid access to the Lincoln Tunnel for quick entry and exiting. Throughput will increase the carrier's capacity from 10,000 to 15,000 pieces per hour. Designed to accommodate loading and unloading of loose-loaded trailers, the overall size of the facility is targeted to grow by an additional 44,225 square feet by Fall 2007. It will have 400 employees when it opens in May.
***Dynamite 3PL Deal For Mystery Buyer? .......European mail & parcel company TNT recently announced it would exit the 3rd party logistics (3PL) field & concentrate on its core business. It mounted a stock buy-back program which has recently concluded. Now, the company is in the news again as the subject of a possible takeover by German investor Cornelius Geber. Geber 1st expressed an interest in TNT in 2005, before the company had announced its decision to sell its logistics business. U.K.-based Transport Intelligence reports Geber has been linked to two private equity houses, but he could be acting in concert with a major carrier. Other speculation brings the name of U.S.-based UPS into play. UPS was also mentioned as a possible suitor for Exel prior to the disclosure that Deutsche Post World Net (DPWN) had launched a bid to take over that U.K.-based 3rd party logistics company. UPS recently acquired U.K.-based courier Lynx which, according to Transport Intelligence, already has a U.K. postal license. UPS has also mounted efforts to establish itself in the German postal market which is due to be deregulated in 2007. With this platform in place, UPS has announced it will begin Int'l mail services in Europe. That announcement could fan the flames of a TNT takeover rumor if, as some believe, Cornelius Geber is mounting acquisition efforts on behalf of another, as yet, unnamed party.
***Acquisition Target Makes Its Own Buys ....... as Dutch mail & global logistics provider TNT has completed the acquisition of Spanish domestic distribution company TG+. No financial details were disclosed. TG+ was established after the 2003 merger between Transcamer and Gomez. It employs about 950 staff and owns 22 depots. TNT has also acquired ISH Nocní Expres, the Czech Republic "innight" (delivering consignments during the night before 8.00 am) distribution services provider. No financial details were disclosed. ISH delivers more than 1,500 shipments per day in the Czech Republic & Slovakia with three depots and a fleet of 90 vehicles.
***Hub Group, Inc. On Trak ...... as the transportation management company focused on intermodal, truckload brokerage, logistics, and distribution services, has announced it will acquire Comtrak, a Memphis-based drayage company, for US$38M.
***Radiant Logistics Inc. Drops Golf & Buys Air ........ as it has acquired privately held Seattle, Wash.-based freight forwarder Airgroup Corp. in a transaction valued at up to US$14M. Airgroup uses a network of independent carriers & more than 100 agents worldwide through its network of 34 exclusive agent offices across North America. Airgroup posted revenue of US$51.5M for the year ended June 30. Radiant changed its name in Oct. last year from Golf Two Inc., despite extent to which the former brand inspired the concept of logistics.
***Odyssey Logistics & Technology Open In NC ...... as the company, which specializes in Int'l transportation and logistics services for chemical & process manufacturers, has established a service center in Charlotte, N.C. The service center will employ some 300 people. Odyssey is based in Danbury, Conn.
***Cargo Lock Down At Detroit ...... as temporary flight restriction will be in effect within a 30-mile radius of Ford Field on Super Bowl Sunday, Feb. 5, from 4 p.m. EST until midnight, the Federal Aviation Administration said. Scheduled commercial & cargo flights will be allowed in & out of Detroit Metropolitan Airport in the suburb of Romulus, and general aviation will be allowed to use some local airports, but traffic will be restricted at Detroit City Airport, the FAA said. Meanwhile, the U.S. Coast Guard said it will enforce a security zone along the Detroit waterfront of the Detroit River that will be off limits to all vessels from 8 a.m. on Jan. 31 until 8 a.m. on Feb. 6. The zone covers 1 mile from Joe Louis Arena to north of the Renaissance Center and extends 300 yards from shore. Authorities will monitor and board vessels that come close to the security zone on the river, which separates Detroit from Windsor, Ontario. The Coast Guard is coordinating local, federal & Canadian maritime security efforts around the Super Bowl.
***Oshkosh Robot Defense Logistics Vehicle .......... as an unmanned version of its Palletized Load System (PLS) vehicle at the U.S. Army Tactical Wheeled Vehicle Component Technology Demonstrations has been unveiled in Yuma, Ariz. Showcasing the immediate application of the technology for the U.S. Army fleet, Oshkosh is demonstrating a real-world mission scenario as the driverless truck transports cargo between destinations 7 miles apart in the Arizona desert. The technology allows soldiers to be taken out of convoy resupply missions or to be re-assigned to other tasks within the convoy.
***Cross Border Standoff ........ as it wasn't just Mexican military-style uniforms that suspected drug runners were wearing when they were confronted by Texas lawmen, the Hudspeth County sheriff says. The men carried Mexican military-issue weapons and drove a military Humvee, said Arvin West, whose officers who were involved in the standoff. "It was military," he said Jan. 27. "Due to the pending congressional hearings, I can't comment further." West said the determination that the equipment was military-issue came from the federal government, but he would not elaborate. A U.S. Army spokesman said he could not confirm West's statement, and the Mexican Foreign Relations Dept. said it would have no comment. The Mexican government has denied that any soldiers were involved in the standoff Jan. 23, in a remote spot along the Rio Grande in West Texas. Texas state police tried to stop three sport utility vehicles on Interstate 10. The vehicles made a quick U-turn and headed south toward the border, a few miles away. Crossing the border, one SUV got stuck in the Rio Grande River, and men in a Humvee tried in vain to tow it out. Then a group of men in civilian clothes began unloading what appeared to be bundles of marijuana and torched the SUV before fleeing. The smugglers escaped back across the border without a shot fired, abandoning more than a half-ton of marijuana as they fled. Mexican officials have said the uniforms and other equipment could have been stolen. Sen. John Cornyn, R-Texas, and other officials have said they will seek hearings investigating such border incursions. U.S. Border Patrol Chief David Aguilar, in El Paso Jan. 27, said he could not rule out Mexican soldiers' involvement in the standoff at Neely's Crossing, about 50 miles east of El Paso. In Mexico, kidnappers & drug smugglers regularly wear police gear, which is sold at street stands. On Jan. 26, Mexico's foreign relations secretary suggested the smugglers may have been U.S. soldiers or American criminals disguised as Mexican troops. Aguilar said he has spoken with his Mexican counterparts and was assured that an intense investigation is under way in Mexico. A California newspaper reported this month that Mexican military units had crossed into the United States 216 times since 1996. It cited a Dept. of Homeland Security document, but department Secretary Michael Chertoff has said many of those incidents were just mistakes. Also Friday, Aguilar said Border Patrol and other law enforcement are reporting that a new violent tactic is being used against them. They said they are being targeted by "flaming rocks," rocks wrapped in cloth, dipped in gasoline, set on fire & thrown across the border. Most of the incidents have happened near San Diego, and one officer has been injured, he said. Authorities fear a deadly confrontation as attacks against Border Patrol agents increase. Last fiscal year there were 778 reported incidents, compared with 396 in 2004.
***Beyond The Slurpy ....... as a convenience store owner has been convicted of smuggling flu vaccine into the U.S. & offering it for sale to a hospital, apparently to cash in on the national shortage in 2004. A federal jury deliberated for just 3 hours before it found Mahmoud A. Abuarqoub, 38, guilty. He faces a maximum of 41 years in prison & US$1.25M in fines when he is sentenced in April. He remains free on bail. Defense lawyer Rocco Cipparone told jurors that Abuarqoub thought it was legal to import the vaccine from the Middle East and sell it to a hospital near his New Jersey home.
2. The Cargo Letter Financial Page _____
**AMR Corp. (parent of American Airlines Inc. DOWN wih 4th-quarter net loss of US$604M, compared to a loss of US$387M for the same period in 2004.
**Burlington Northern Santa Fe Corp. DOWN with a US$71 million pre-tax 4th quarter loss related to an agreement to sell certain line segments to the state of New Mexico.
**Canadian National Railway Co. UP with 4th-quarter net income of US$374M up 14% from same period last year.
**CNF (parent company of Menlo Worldwide Logistics & Con-Way Transportation) UP with Q4 net income of US$51.2M, up 59% over 2004.
**Continental Airlines. DOWN with a net loss of US$43M, compared to a US$208M net loss in the same quarter 2004.
**Covenant Transport. UP as net income for the 4th quarter rose to US$4.4M or 32 cents a share, from a loss of US$6.5M or 32 cents a year earlier.
**CSX Corp. UP 4th quarter, with net income of US$237M, up 49% from US$159M for the same 2004 period. For the full year, CSX posted a net income of US$720M, up 72% from 2004.
**GATX Corp. DOWN with a net loss from continuing operations of US$112.3M or US$2.22 per diluted share for Q4 2005 and a net loss of $15.1 for the year.
**International Shipholding Corp. DOWN with a loss of loss of US$225,000 for 4th quarter 2005.
**Manugistics. DOWN as net loss narrowed to US$4.6M for the 3rd quarter ended Nov. 30, compared to a loss of US$13.3M in 2004.
**Norfolk Southern Corp. UP with record 4th quarter net income of US$362M up 37 % from US$264M in the year-earlier period. Net income for the full year 2005 was also a record US$1.3Bn up 39% from it previous best ever, US$923M posted in 2004.
**Old Dominion Freight Line. UP as profit for the full year was US$53.9M or US$1.45 a share, from US$39Mor US$1.06 in 2004. Revenue rose 28.8% to US$1.1Bn.
**Orient Overseas (International) Ltd. (OOCL). UP with a 2.2% increase in its 4th-quarter revenue at US$1.02Bn from US$998.1M in the same quarter 2004.
**SCS Transportation, Inc. UP with net income of US$27.5M, including US$4.4M after tax from the real estate gain, up from US$19.3M in 2004.
**Southwest Airlines. UP with double-digit increases to its net profit of US$86M in the 4th quarter, up 53.6% from US$56M in the same period 2004. For the full year, Southwest reported a net income of US$548M, up 75.1% from US$313M in 2004.
**UPS. UP as net income jumped 21.1% to US$1.05Bn from US$866M in 4th-quarter 2004 -- representing an average 16.8 million packages delivered each day. For the full year net income totaled US$3.87BN, up 21.1% compared to US$3.3Bn in 2004.
**UPS Supply Chain Solutions (logistics arm of UPS) UP as revenue soared 146% to US$1.91Bn in 4th quarter.
**U.S. Xpress Enterprises. UP with record 4th quarter earnings of US$7.1M or 46 cents a share, from US$5.9M or 40 cents a year earlier. For the year, the company's income was US$9.4M or 59 cents a share, from US$16.4M or US$1.14 in the previous year.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ___
***United Airlines Reemerges ........ as parent company UAL Corp. said it will list its new stock on the Nasdaq stock exchange when it emerges from Chapter 11 bankruptcy protection in early Feb. Under its plan of reorganization, approved by the U.S. Bankruptcy Court last week, UAL will begin to issue up to 125 million shares of common stock, most of which will go to the company's former unsecured creditors. UAL will trade under the ticker symbol "UAUA." UAL Corp. has secured a US$3Bn loan with JPMorgan & Citigroup, to enable United's exit from bankruptcy. The financing has a term of 6 years & was secured by substantially all available assets and comprises a US$300M revolving credit facility & an up to US$2.7Bn term loan. Survival is questioned.
***Light At End of The Tunnel? ....... as the legacy carriers in the U.S. market, including United, will emerge from the financial woes that have plagued them since 2000 and will achieve 5% to 6% growth in passenger demand & revenue this year, according to predictions by Unisys Transportation experts. Unisys forecasts that airlines will begin to look for new ways to compete through more streamlined and secure business operations in 2006. They will focus on more self-service operations, radio frequency identification (RFID) tags and open source technology. Full story:
***U.S. Domestic Air Volume Up ....... as according to the latest U.S. Air Transport Assn. statistics, Int'l air freight & express shipments carried by U.S. airlines increased 3.6% to 1.17 billion revenue ton-miles in Nov., from 1.13 billion revenue ton-miles in the same month 2004.
***Asia Air Volume Up ....... as the Kuala Lumpur-based Assn. of Asia Pacific Airlines reported that its 17 member airlines transported 4.7 million freight-ton kilometers in Nov., up 4% compared to the same month in 2004. The association said Int'l freight traffic capacity increased 3.1%, resulting in a 6% improvement in freight load factor, to 68.7 percent. Assn. of Asia Pacific Airlines members are: Air New Zealand, All Nippon Airways, Asiana Airlines, Cathay Pacific Airways, China Airlines, Dragonair, EVA Airways, Garuda Indonesia, Japan Airlines, Korean Air, Malaysia Airlines, Philippines Airlines, Qantas Airways, Royal Brunei Airlines, Singapore Airlines, Thai Airways Int'l & Vietnam Airlines.
***Dubai Builds World's Biggest ........ as when the US$8.2Bn project is completed, Jebel Ali Int'l Airport will be the combined size of O'Hare in Chicago & Heathrow in London. The Middle East is rapidly growing as a commercial center and Dubai, in particular, is positioning itself as an air crossroads between Asia, Europe and North America. The new airport is projected to serve passenger and air cargo transportation to 2050. When completed, the Airport will be able to handle annual volumes of 120 million passengers and 12 million tons of cargo. Initial phases of the project are aimed at handling a large portion of air cargo that moves through Dubai. Work has already begun on the 4.5-km runway that will serve in the main for cargo. It is slated to open in the early part of 2007.
***Cargo 2000 Gains Two ......... as Asiana Cargo has become an Industry Associate member of Cargo 2000 and has stated a commitment to ultimately become a full member of the group. Cargo 2000 began publishing performance data for its members in 2005, including FWB data that shows booking quality levels from forwarder to airline, and NFD performance milestones that monitor "delivered as promised' service levels from airline to forwarder. Asiana Cargo is the 15th largest cargo airline in the world. Asiana Airline's fleet of 59 aircraft includes 6 all-cargo freighters, and the carrier's cargo network reaches 22 cities in 16 countries in Europe, Asia and North America, a release issued on behalf of Cargo 2000 members said. After 6 years, Japan Airlines Cargo has rejoined Cargo 2000.
***Airbus Wins A Lap In The Race ....... as European aircraft manufacturer Airbus reported record orders in 2005, with 1,055 net orders surpassing rival Boeing's 1,002 net orders. Airbus said its net orders make up 52% of the market and comprise 918 Single Aisles, 166 A330s, A340s and A350s, and 20 A380s, as well as seven A300 Freighters. The Toulouse, France-based company valued its 1,111 gross orders at US$95.9Bn. In 2005, Airbus delivered 378 aircraft, helping it to achieve revenue of US$27Bn.
***But Boeing Strong In The Race ....... as it received a record 1,002 net commercial airplane orders from 72 different customers in 2005, up 268% from 272 net orders in 2004. Gross orders in 2005, excluding cancellations and conversions, totaled 1,029. The Seattle-based aircraft manufacturer's previous record of 877 net orders was achieved in 1988, &included the pre-merger Boeing and then-McDonnell Douglas totals. In 2005, the 737, 777 & 787 aircrafts all achieved individual records with net orders of 569, 154 and 235 respectively. Boeing said it also received 43 net orders for the 747 plane and 15 for the 767 aircraft.
***FedEx Express Takes Big China Step - Alone ....... as it has entered an agreement with Tianjin Datian W. Group Co. to buy out its 50% share of the FedEx-DTW Int'l Priority express joint venture and DTW Group's domestic express network in China for US$400M. When the deal closes, FedEx will employ more than 6,000 workers in China. FedEx said the transaction is still subject to government approvals & licensing. FedEx was the first express carrier to enter the China market in 1984. The company serves China with 23 frequencies per week.
***When Worlds Collide ...... as World Airways Inc. locked out pilots operating its commercial flights on Jan. 30. The pilots of World Airways had picketed the cargo operations of Eva Airways at Los Angeles Int'l Airport (LAX) on Jan. 20, as well as the corporate headquarters of World Airways, Inc. More than 90 pilots & their supporters picketed both sites showing their commitment to their negotiation committee. Eva Airways is the largest commercial cargo contract that World Airways, a wholly owned subsidiary of World Air Holdings, Inc. services. On Jan. 23, the Negotiation Committee for the pilots of World Airways began meeting with company officials in the offices of the National Mediation Board (NMB) in Washington, DC. Since Jan. 28, 2006, the more than 400 pilots, member of Teamsters Local 986 & World Airways, Inc. have been free to exercise self-help -- which could have included a strike if a new contract was not reached -- but World made a 1st move with the lock out. The airline headquartered in Peachtree City, GA, also provides cargo services for several Int'l carriers.
***UPS Pilots Must Talk ....... as the federal mediator in charge of negotiations between the package delivery company and its pilots put the talks on indefinite recess. Previously members of the Independent Pilots Assn. (IPA) had taken a vote authorizing a strike if a new contract was not reached. It asked the mediator for release from negotiations, which, if allowed, would have permitted the pilots to strike. The mediator did not release the IPA from negotiations &endash; placing them on indefinite recess instead &endash; with the hope both sides would re-evaluate their positions and move toward a negotiated settlement. Under the Railway Labor Act, during the recess IPA pilots must continue to work under their existing contract.
***Your Luggage As Cargo ....... as Ryanair Airline, a low-cost Dublin based airline, has announced to passengers that they will be charging for checked luggage & cutting fare prices for those without luggage. By decreasing fares for those who travel without luggage and charging a fee for checked-in bags, Ryanair will realize the savings associated with lighter loads -- leaving more room for revenue cargo. No truth to the rumor that Ryanair Airline will soon price tickets based on a passenger's dimensional weight.
***Puffer, SafeView & The Shoe Scanner ....... as GE's Global Research Center has unveiled off some of the tools it has developed to detect explosives, weapons & other threats to the traveling public. One of the systems -- GE's EntryScan -- is already in use at airports in the United States and in high-risk locations overseas. The unit is nicknamed the "puffer" because it hits individuals with a gentle puff of air as they pass through. That air is then quickly analyzed for traces of explosives and in some cases, narcotics. The units, which retail for a bit more than US$100,000 each, are already in use at 28 or 29 airports domestically. Two of the devices will be installed at Albany Int'l Airport this spring. Another device allows passengers to leave their shoes on when passing through the Shoe Scanner, clearing the checkpoint in 20 seconds. The SafeView Scout device, meanwhile, can detect hidden weapons & other threatening devices within 2 to 3 seconds. Both new devices are still being tested & refined.
***Grab Your Doodle Pad ...... as NASA is challenging United States' industry to establish capabilities and services that can open new space markets and support the crew and cargo transportation needs of the International Space Station. For the first time, NASA is seeking non-government vehicles and commercial services to provide crew and cargo transportation for human space flight. The final announcement for Phase 1 of the Commercial Crew/Cargo Project invites proposals for Commercial Orbital Transportation Services Demonstrations. For announcement details on the Web.
***Mile High Club? ........ as hoping to ease the nightmare of flying next to a crashing bore, a company in New York will now match like-minded passengers to help make the time fly. Inspired by a flight where he found himself happily seated next to Miss Texas, company founder Peter Shankman says he set up AirTroductions to give travelers a chance to choose their seatmates. "It is for anyone who travels who does not want to have to deal with the psychological hell of sitting 2 inches from someone you don't know for 8 hours," he said. To use AirTroductions, travellers register online, listing personal details in a profile. When they post their traveling itineraries, the registry provides information on other people taking the same flights. The registry is free until a user opts to contact a fellow traveller for a US$5 fee. Typically, they meet in an airport, where they can arrange to sit together, Shankman said. Nearly 4,500 people have enrolled, although only about 60 have made matches since the registry kicked off last fall, he said. Randy Petersen, editor of InsideFlyer magazine, said he was not sure the idea would fly. Having a good seat trumps chatting with a stranger, he bets. The system allows passengers to note if what they really desire is a seatmate who will leave them alone -- but perhaps better to just leve AirTroductions alone. Hey Pete, move on to the next project. This one crashed on take off.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
***FMC Will Streamline Filing ...... as the U.S. Federal Maritime Commission says it will introduce significant upgrades to its system for filing service contracts & NVOCC service arrangements on Feb. 1. The FMC SERVCON system will have faster information retrieval & more reliable system architecture. SERVCON will have the same look as the current system with the exception of a small change in the menu selection screens. Filers will be able to view only menu selections they need for their own activities, with menu options such as "file contracts" or "view personal directory." Technical information is available from the Office of Information Technology by e-mailing:
***EU Backs Down ...... as the European Parliament on Jan. 18, rejected plans to liberalize port services across the European Union that had sparked mass strikes by dock workers and a violent protest in front of the EU legislature. The parliament voted 532-120 against the draft legislation, which proposed opening cargo handling to competition in ports where loading and unloading currently is run by monopoly handlers. The bill would also have allowed ship's crews to handle cargo themselves on some EU routes. The vote was welcomed by dock workers' unions & some EU governments which feared the new legislation would compromise safety and do little to enhance competition at European ports.
***PierPASS Will Foil The Imposter Driver ....... as in an effort to increase security measures at marine terminals at the Ports of Los Angeles and Long Beach, PierPASS announced last week it has launched a new security program entitled TruckTag. PierPass is a non-profit group that was created by marine terminal operators in Long Beach & Los Angeles to reduce congestion around both of these ports. With TruckTag, which is slated to begin kick off in mid-to-late March, Radio Frequency Identification (RFID) tags&emdash;distributed by PierPASS&emdash; will be installed on trucks, providing a "quick and secure check in" at both terminals. PierPASS will provide 10,000 RFID tags to trucking companies, who will subsequently give them to drivers. "This program is geared to enhance existing security requirements that terminal operators are required to do by installing these [RFID] tags on trucks that come and go to port terminals," said PierPASS. Going forward, when a truck arrives at a terminal at either the Port of Los Angeles or Long Beach, the RFID tag will be read automatically by an electronic reader at the terminal's gate. The driver will insert his driver's license into a machine verifying that the truck & driver are authorized to be at the terminal. As the system stands now, a driver only displays a license to a terminal security guard. Driver & truck data in the RFID tags will be electronically read and validated through a data base administered by eModal, a trucking company & driver database vendor. PierPASS Inc. has announced that more than a million truck trips have now been diverted from peak daytime traffic since the start of the OffPeak program on July 23, 2005.
***Awash In Capacity? ....... as more than 5 million TEU capacity scheduled to enter into service in the next 3 yrs - 1.5 million in 2006 alone. This raises raise questions about supply & demand. Rates are already dropping with the lowest seen so far being US$900 per TEU Asia to Europe.
***Pirate Payback ........ as U.S. Navy destroyer USS Winston S. Churchill captured a pirate vessel 54 miles off the coast of Somalia on Jan. 21. The Navy detained & questioned 26 people aboard the captured vessel. USS Winston S. Churchill fired two warning shots while chasing the suspect vessel in the Indian Ocean. Indian crewmen aboard the detained vessel told the Navy that Somali pirates seized their ship, or "dhow," almost a week ago near Mogadishu and used it to attack cargo ships in the area, the AP said. The same pirates attacked the Bahamian-flag bulk M/V Delta Ranger 200 miles off the Somalian coast. Photos
***Three Names In 170 Years ....... as Lloyd Triestino di Navigazione SpA, the global ocean carrier based in Trieste, Italy, said it will change its name to Italia Marittima SpA, effective March 1. Lloyd Triestino was incorporated in 1836 when Trieste and its port were part of the Austrian-Hungarian Empire. The original name of the company, Oesterreicher Lloyd, changed to Lloyd Triestino in 1919, following World War I. The Evergreen Group acquired Lloyd Triestino in 1998, when the Italian government decided to privatize many state-owned companies.
***Grand Alliance Shuffle ....... as members Hapag-Lloyd, NYK Line, OOCL and P&O Nedlloyd have filed with the U.S. Federal Maritime Commission a modification to include CP Ships in the alliance for services in the transpacific trade. Hapag-Lloyd acquired CP Ships for US$2.3Bn in Dec. CP Ships' inclusion will help cover the loss of P&O Nedlloyd, the largest carrier in the Grand Alliance, who will leave the group in Feb. following its takeover by A.P. Moller-Maersk in Aug.
***Southern Sharing ...... as the U.S. Federal Maritime Commission has authorized an agreement between Hamburg Sud and Compania Chilena de Navegacion Interoceanica (CCNI) to share vessel space between the U.S. East Coast & Caribbean and the West Coast of South America.
***Welcome Back ....... as the Port of New Orleans says cargo levels are up to 80% of normal volumes before the city was devastated by Hurricane Katrina and subsequent flooding, while breakbulk volumes are also improving, and predict that during 1st quarter of this year breakbulk volumes will reach about 65% of pre-Katrina levels.
***Faster BC Dock Pull Off ....... as the Canadian National Railway Co. & Canadian Pacific Railway have signed an agreement designed to improve services at the Port of Vancouver, British Columbia. The agreement includes a series of operational initiatives, expected to begin in March, to improve the flow of freight to & from the port by operating direct-to-destination trains that bypass yards & eliminating railway-to-railway handoffs. It will also extend the railways' existing directional running zone in the Fraser Canyon west to the Gateway ports & terminals.
***The Other Vancouver Prospers ...... as the port's record year of cargo in 2005 has the Port of Vancouver USA on track to nearly double the size of the port within 5 years. Overall ship calls reached an all-time high of 526 vessels in 2005, a 22% increase over 2004 at bulk and breakbulk terminals. Bulk & breakbulk tonnage increased 40%, to almost 2 million metric tons.
***Shenzhen Steps Way Ahead ....... as the China port has handled a record number of containers in 2005&emdash;maintaining its ranking as the world's 4th-busiest port. China's exports rose 28% last year, resulting in a boost of goods shipped through Shanghai, Shenzhen, and other Chinese ports. And, because of lower costs, the Shenzhen port has been taking a larger share of southern China's cargo traffic from Hong Kong. Shipping a 20-foot box from Shenzhen costs an average $333 less than shipping from Hong Kong. Shenzhen moved 1.4 million TEU in Dec. 2006.
***Faster Big Ditch ....... as "Canal Waters Time" (CWT), the average time it takes a vessel to transit the Panama Canal including waiting time for passage, decreased 16.1% &endash; to 20.57 hours from 24.51 hours. Compared to 1st quarter metrics for fiscal year 2004, CWT has decreased by nearly a third. Moreover, CWT for booked vessels (those ships holding reservations) decreased as well by nearly 7% &endash; to 15.51 hours from 16.66 hours. Vessels that used the advanced booking system increased to 88.8% of all transits, up from 85.7%. The overall number of transits decreased 1.9% to 3,299 transits.
***New Waiting Room For Big Ditch ....... as a new "tie-up" where vessels can anchor to await passage through the Panama Canal will increase efficiency & thus capacity by allowing waiting vessels more quickly get into the canal. One Panamax or two smaller vessels may be moored at the Cucaracha (Reach) tie-up station. Officials said that would allow more flexibility in scheduling, especially during the fog season and when there are lock maintenance outages. The tie-up can also be used for vessels experiencing system difficulties while in transit. The new station is located near the Pacific entrance to the canal on the east side of the Gaillard Cut, and allows vessels to advance from the Pacific Ocean to the southern end of the Gaillard Cut while a vessel heading toward the Pacific is still making its passage. The Panama Canal Authority did not say how much the new tie-up would increase capacity, but noted it would reduce transit times for vessels that previously had to wait further out from the entrance to the canal.
***A Little Worse For Wear ....... as Carnival Cruise Lines' SuperLiners M/V Sensation & M/V Holiday, currently on charter to the U.S. government as part of Hurricane Katrina relief efforts, will each undergo a multi-million-dollar refurbishment prior to re-entering service this spring.
***FMC Enjoins Household Goods Movers ........ as on Jan. 17, 2006, the U.S. District Court for the Southern District of Florida granted the Federal Maritime Commission's request for a preliminary injunction against Defendants All-In-One Shipping, Inc., Around The World Shipping, Inc., Boston Logistics Corp., three Florida companies, and their respective officers, Defendants Joshua Morales, Daniel Cuadrado, and Elizabeth F. Hudson, as well as Defendant Global Direct Shipping, an unincorporated entity that also operates in Florida. The injunction prohibits the Defendants from acting as non-vessel-operating common carriers without a license, proof of financial responsibility, or public tariff. Violation of the injunction could lead to the Defendants being held in civil contempt by the court.
***Throughput >>> Port of Dunkirk reports the French port handled 205,000 TEUs in 2005, up 2% over 2004. >>> Port of Los Angeles has set a nationwide container volume record in 2005 by handling nearly 7.5 million TEUs in 2005 (figure does not count Port of Long Beach next door. >>> Port of Marseille Authority said that industrial disputes and declining trade with North Africa negatively impacted its container throughput for 2005, which was down 1% to 908,000 TEUs. >>> Port of Montreal reached its 2nd highest cargo volumes at 24.3 million tons, up 3% from 2004. and 1.25 million TEUs (28,264 more than in 2004). >>> Port of Singapore is #1 with 23.2 million containers handled for 2005, passed Hong Kong with 22.4 million >>> Port of Rotterdam, Europe's largest container port, reported that its container volumes increased 13.4% to 9.3 million TEUs in 2005, from 8.2 million TEUs in 2004. >>> Canadian Port of Vancouver handled a record 1.77 million TEUs in 2005, up 6% from 1.66 million TEUs in 2004.
***They Burned Down The White House ......... as Artifact Recovery & Conservation, Inc. (ARC) has been conducting an archaeological survey of a site off the coast of Halifax, Nova Scotia, under an official Treasure Trove licensing agreement with the provincial government. The focus of the exploration has been the location where it is believed HMS Fantome, a French brig captured by the British in 1810 & used as a gunboat during the invasion of the Chesapeake in 1814, went down on Nov. 24, 1814, three months after British troops invaded Washington, D.C. Surviving manifests for the Fantome indicate that it was carrying valuables taken from the White House, U.S. Treasury & Capitol Building when it was lost on a reef of rocks near Prospect, some 20 miles southwest of Halifax, while escorting a convoy of ships. No actual wooden ships from the period are left on the site, having long since disintegrated. The company hopes to find what remains of the ship's historic cargo. The War of 1812, often called "The Second American Revolution," was prompted by British interference with U.S. sea trade with Europe. On August 24, 1814, British soldiers invaded Washington and looted and burned key government buildings, including the Capitol and White House.
***FMC Revokes Licenses ....... as the U.S. Federal Maritime Commission has revoked 6 ocean transportation intermediary licenses for failure to maintain valid bonds: Pacific Multi-Modal, Long Beach, Calif.; JJB Trucking Services Corp & Shipping, Elizabeth, N.J.; Falcon Transportation & Forwarding Corp., Farmingdale, N.Y.; Berr Int'l, Miami; Cross Trans Service USA, Elk Grove, Ill.; and Touchstone Shipping & Logistics, Houston.
***Queen Touches Bottom .......as RMS Queen Mary 2, the world's largest and most expensive ocean liner, should be able to continue on its voyage to South America even though one of its four propulsion motors hit the side of a shipping channel on Jan. 17. The US$800M ship was being examined in Port Everglades, but her departure was tentatively scheduled for Jan. 18 evening, said Cunard Line, based in Santa Clarita, Calif. The vessel returned to the Fort Lauderdale-area port shortly after leaving Jan. 17 when the crew reported hearing & feeling a shudder.
***Queen Touches Queen ........ as since Queen Mary 2's dazzling debut in 2004, Cunard enthusiasts have wondered if the grand ocean liner would ever meet her legendary predecessor, the Queen Mary. On February 22, 2006, that question will be answered when Queen Mary 2 makes her maiden call to Los Angeles and unites for the first time with her namesake, the Queen Mary, in nearby Long Beach. Retired from maritime service for nearly 40 years, the Queen Mary, which sailed from 1936 through 1967, is now permanently berthed in Long Beach and is one of the city's most well-known attractions. The historic meeting of the two Queen Marys will take place twice on Wednesday, February 22 -- at both 7:00 am and again at 5:00 pm. -- as Queen Mary 2 sails through outer Long Beach harbor, sounding a special greeting to the Queen Mary. The first-time salutation will take on even more meaning as Queen Mary 2 carries one of her namesake's original whistles, the tone of whose deep bass A note can be heard up to ten miles away.
***Despicable ...... as 2 of 7 stowaways thrown overboard the bulker M/V African Kalahari in Durban harbor this month drowned.
***This Month In U.S. Navy History .........
1870 - Cmdr. Thomas Selfridge sails the gunboat Nipsic on an expedition to ascertain the best location for an interoceanic canal across the Isthmus of Darien.
1942 - USS Gudgeon is the first U.S. sub to sink an enemy submarine in action, Japanese I-173.
1960 - The Navy demonstrates the value of moon communication relay, which is used in fleet broadcasts.
1962 - USS Cook (APD 130) rescues 25 survivors after a section of the Panamanian tanker SS Stanvac Sumatra broke in two in the South China Sea.
1986 - The Space Shuttle Challenger explodes, killing Cmdr. Michael Smith & 6 other astronauts.
5. The Cargo Letter Cargo Damage Dispatches
**Back By Popular Demand**
We're sorry, but there were so many sinkings, explosions, pirate attacks, fires, cargo mishaps, battles on the water & other disasters at sea that we do not have room to print even the highlights this month. Many people lost their lives at sea this month!! Don't miss the pirate attack on M/V Seabourn Spirit
But you can read all this month's disaster news at our special Internet web feature which provides full details of each event -- our Vessel Casualties & Pirate Activity Database. Bookmark the site and visit every day! Updated twice daily. You will be amazed.
SPECIAL NOTE: Please view the dramatic new pictures at our special "Gallery of Cargo Loss" website feature.
See our new feature for Jan. 2006: "A Day At The Beach" -- continuing photo coverage of M/V APL Panama, which remains grounded at Ensenada, Mexico. Amazing stuff!
See our other new feature for Jan. 2006: "Curse of The Pequot".
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..............
Bye Bye BlackBerry? ......... is the end near for your favorite computing device?
Microsoft May Step In After BlackBerry
Doing Business In China 2006 Calendar
Int'l Space Station
Int'l Refrigerated Transportation Assn.
Know The China & India Holidays Before You Schedule
Munitions At Sea ......... alerts maritime community of the potential explosive hazards associated with munitions inadvertently recovered from the sea and actions that should be taken to ensure safety.
New Container Laws In Spain
RFID to Plug Supply Chain Gaps & Counterfeiting
TruckPol ........ policing UK road freight crime
UK Dept. for Transport Focus on Ports 2006 .........provides comprehensive statistical information.
U.S. Pipeline and Hazardous Materials Safety Administration .......proposing to amend the hazardous materials transportation regulations
Do It Yourself Video Security
Global Air Cargo 2006
RFID Forecasts, Players & Opportunities 2006 - 2016
World Trade Organization Events
15th Annual Int'l All Cargo Conference IAAC .......... 23-25 May 2006, Houston
2006 Material Handling & Logistics Show and Conference ........ March 27, 2006 at Cleveland's I-X Center
2006 Supply Chain Security Training Seminar For C-TPAT Certified Partners ....... March 1 to 3, Costa Mesa, Calif.
Intermodal South America 2006 ........ April 26 to 28, 2006, Transamerica Expo Center, Sao Paulo, Brazil
Int'l Association of Refrigerated Warehouses -- Int'l Association for Cold Storage Construction & World Food Logistics Organization -- World Convention......... April 22-27, 2006, Walt Disney World Swan
Logistics & Supply Chain Forum ....... May 7-10, 2006, aboard M/V Norwegian Dawn, Ex-NYC.
RORO 2006 .......16-18 May 2006, Flanders Expo, Ghent, Belgium
Shipbuilding-Machinery & Marine Technology Int'l Trade Fair ..........Sept. 26-29, 2006 -- Hamburg, Germany.
TOC Asia - Terminal Operations Conference and Exhibition & Conference for Asia. .......14 -16 March 2006, BEXCO, Pusan, South Korea
Transportation & Logistics Council - 2006 Annual Conference ....... April 2 to 5 2006, Crowne Plaza Hotel, San Antonio Riverwalk in San Antonio, Texas
U.S. General Services Admin. 3rd Annual Household Goods & Freight Forum ........Feb. 22-23, 2006, Anaheim, Calif. Co-sponsored by American Moving & Storage Assn.
Be A Bigg Loser
Bid On Capt. Morgan Bust
Cosmodex ........ new search engine that awards loyalty points
Megafloat ....... bottom of page
New Georgia Encyclopedia
New Orleans Shipwreck & Treasure Adventure ........ re-opens after Katrina
The Philippine Name Game
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases _______
Rationis Enterprises, Inc. of Panama v. Hyundai Mipo Dockyard Co., Ltd.
Second Circuit U.S. Court of Appeals
17 Oct. 2005
Case arose out of the splitting of a ship along a weld-line, following the addition of a new middle section that had lengthened the ship. That lengthening work took place in Korea in 1984. The casualty took place in the Atlantic Ocean in 1997. The court followed the Supreme Court's admiralty choice-of-law analyses as set forth in Lauritzen v. Larsen and Hellenic Lines Ltd. v. Rhoditis and considered the following 8 non-exhaustive factors: (1) the place of the wrongful act; (2) the law of the ship's flag; (3) the domicile of the injured party; (4) the domicile of the shipowner; (5) the place of the contract; (6) the inaccessibility of the foreign forum; (7) the law of the forum; and (8) the shipowner's base of operations. The factors focusing on the shipowner were irrelevant because it was not a party to this case. Further, the place of contract was irrelevant because this was a tort case. The court also did not see the inaccessibility of a foreign forum as an issue since New York courts were fully capable of applying foreign law in the case. For similar reasons, the court was unconcerned with the law of the forum because the case was pending in the United States. But the place of the wrongful act, the alleged negligent welding, which took place in Korea, was relevant, and in the court's opinion, the most important of the factors. Korea certainly had an interest in regulating behavior there. Based on the finding that Korean law applied, the 2nd Circuit reversed the finding of liability against Hyundai. Under two code sections of Korean law that were potentially applicable, each of which contained a ten-year statute of repose, the plaintiffs were barred from recovering from Hyundai.
Holmes v. Atlantic Sounding Company, Inc.
5th Circuit U.S. Court of Appeals
No. 04-30732, Jan. 19, 2006).
U.S. Court of Appeals for the 5th Circuit has reversed course and ruled that a barracks barge is a vessel for purposes of the Jones Act. In the instant case, plaintiff was hired as a cook on a barracks barge and was allegedly injured on her first day at work. She brought suit against her employer and the barge owner, alleging, among other things, negligence under the Jones Act. On reconsideration, the court held that, as long as a water-borne structure is practically capable of being used for transportation on navigable waters, it is a vessel for purposes of the Jones Act. Read the opinion
Written from wire stories, the Associated Press, Reuters, Hong Kong Shipping News, Lloyds & other world sources.
The Cargo Letter Correspondents:
Michael S. McDaniel Esq, Editor (Countryman & McDaniel)
David Schuchman -- Interpool Corp. -- Webmaster of The Cargo Letter Archive
Libby Thompson (Countryman & McDaniel)
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