Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
26 April 2006
Good Wednesday Morning from our Observation Deck......overlooking the officially designated "Cargo City" area and...... Runway 25-Right, at Los Angeles International Airport, voted "Best Cargo Airport in North America." Here is our industry review for April 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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Contribute your knowledge, stories & company information.......by e-mail to The Cargo Letter. We strive to bring you useful information which is timely & topical. Be sure to visit our website.
Our corporate sponsor &endash;- Interpool, Inc. -- named again to Forbes "Best 200 Small Companies" List -- for the 2nd consecutive year! -- http://www.interpool.com/Michael S. McDaniel, Editor, Countryman & McDaniel, forwarder/broker/trade consultant attorneys at LAX.
INDEX to The Cargo Letter:
OUR "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 _____________
***Our Cargo Law Website ........ as for March 2006 we received a record 4,378,396 hits at a maximum of 196,154 hits per day. Our traffic continues to run high, in part due to the excitement over our TRANSCAMS renewal project -- featuring transport related live camera action at airports, ports, harbors, border crossings, warehouses, air traffic control, spaceports, satellite feeds & even live global coverage of vessels at sea. Many of these cameras were discontinued over the 10 years of the Cargo Law Website, but thanks to the efforts of our Libby Thompson, the TRANSCAMS feature is now mostly restored from its former total of about 640 cameras to a new record of 1,033 live cameras at current count. We expect the new total to reach well over 1,500 cameras when the camera renewal project ends this summer. Many of these cameras can be controlled by you with tilt & zoom! Travel where world events occur. Your daily world journey. Where will you go today?
***Best Anti-Terror Practices ........ as U.S. Customs and Border Protection has completed its catalog of best practices designed to help guide companies to meet or exceed minimum security requirements for imported cargo. The booklet gives examples of steps taken by ocean, air and motor carriers, logistics companies, suppliers and importers who voluntarily participate in the Customs-Trade Partnership Against Terrorism to ensure they and their business partners have secure supply chains. Here is a sample of some of the security measures CBP says can be copied to help a company gain credit as a trusted shipper whose cargo is subject to fewer inspections:
* An ocean carrier uses canine patrols and carbon dioxide detectors to search for stowaways on vessels at each port of call before sailing.
* A trucking company president provides breakfast to his dispatchers & drivers on Saturday and uses the time to provide training & discuss transportation security. The president documents topics discussed and employees who attended, and informs absent employees about the material.
* A company posts risk analysis & threat assessments for its markets on its corporate intranet in order to inform buyers, logistics managers and security personnel about the necessary levels of security to protect corporate assets and shipments.
* A freight forwarder requires that the U.S. importer of record introduce all new shippers and will not do business with unknown entities.
* A motor carrier has an employee stationed at the border to monitor arrival times. If there is a significant unexplained time variance, the employee will contact CBP to flag the shipment for a courtesy examination.
* A motor carrier monitors communications between the driver, dispatcher and receptionist to detect internal conspiracies. The carrier also rotates dispatcher assignments & administrative staff to prevent collusion.
* A factory takes a digital picture of the back of the container before the doors are closed and sealed. After the container is sealed, digital pictures are taken of the seal and all sides of the container. The pictures are transmitted to the port terminal operator and the distribution center in the U.S.
Study the complete list.
***U.S. Transport Worker National ID ........ as an official with the Dept. of Homeland Security told National Industrial Transportation League's Spring Policy Forum on April 14, that the agency plans to introduce a single identification card for transportation workers later this year. He said the agency was "moving forward very, very aggressively" on its Transportation Worker Identity Card, or TWIC and plans to publish a proposed rule "this spring" and hopes to have a final rule out "by the end of this fiscal year." Industry executives anticipate that the cost of fully deploying the Transportation Workers Identification Credential will fall between US$100M to US$150M. That price tag includes the expense of 10 million cards distributed to transportation workers nationwide -- at a rate of US$7 to US$8 per card, plus the management of the infrastructure. Sadly, this remedy seems to be somewhat down the line.
***Import Cost Down, But Not For Long ........ as the price of goods imported to the U.S. fell 0.4% in March, the U.S. Labor Dept. said. The decline followed a 0.5% drop in Feb. Economists had forecast prices to rise 0.2%, Bloomberg reported. Prices fell 0.3% excluding oil, Labor said. Petroleum prices fell 0.7% in March, before the recent runups started in April. If you've been to the gas pump lately, this cost drop is just a memory.
***3PL Hits Record .......... as revenues for U.S. based 3rd party logistics providers (3PLs) passed the US$100Bn mark for the 1st time in 2005, according to a report recently released by Armstrong & Associates, a supply chain management consultancy. The report, dubbed "Is Bigger Better? 3rd Party Logistics Financial & Acquisition Results for 2005," notes that 3PL gross revenues for 2005 came in at US$103.7Bn, representing a 16% increase from 2004. Read the study.
***Import Permits Online ....... as the U.S. Dept. of Agriculture's Animal & Plant Health Inspection Service has launched a new online system to file, process & track import permit applications. "Submitting applications and receiving permits via the Internet will save customers a tremendous amount of time and effort," the agency said. The program allows importers to pay by credit card and process permit applications online for certain plant protection and quarantine & biotechnology and regulatory services' notifications. Veterinary service permits will be added on July 3.
Appply To Use Program
***Call of The Wild ........ as the U.S. Centers for Disease Control & Prevention will hold a public meeting in Decatur, Ga., May 18 to discuss issues concerning the spread of diseases through imports of exotic animals. Wild animals carry a variety of diseases that may be transmitted to humans. In 2003, an outbreak of monkeypox in the U.S., which involved 37 confirmed human cases, was traced to imports of African rodents. The CDC is now extremely concerned about the import of highly pathogenic avian influenza (H5N1) through exotic bird imports. Contact Kelly Crossett (919) 313-7615 or by e-mail:
***Not A Kernel of Truth To The Charge ...... as the U.S. Corn Coalition praised a final ruling this month by the Canadian Int'l Trade Tribunal which determined Canadian corn producers are not negatively impacted by imports of unprocessed U.S. corn. The decision comes in response to allegations that U.S. dumping & subsidizing of grain corn harms Canadian producers and a determination in March by the Canadian Border Services Agency, which recommended an import duty of US$1.47 per bushel of U.S. corn be imposed for up to 5 years.
***UPS Trade Direct -- From Big To Little To Door ....... as the new UPS system eases the move of goods from the U.S. to Europe & Canada through Customs by consolidating them in one shipment even though they may be delivered to a variety of destinations. An advantage is that shipments need not be separated, eliminating the need for receiving country distribution centers in order to break them apart. UPS explains the shipping process: goods destined for Europe are packaged individually and labeled for delivery. They are combined into one freight shipment, and then moved abroad in the air or on the water. Goods clear Customs as one unit. The unit is then separated back into individual parcels or less than truckload shipments. They are then placed into the UPS small package system or an LTL carrier for final delivery. There is shipment visibility throughout with the use of UPS Flex Global View technology &endash; and just one point of contact and one shipping invoice. UPS Trade Direct
***Wal-Mart Leaning? ....... as it is telling its suppliers it plans to buy less products in an effort to keep its inventory lean, Bloomberg has reported. Many suppliers & carriers have either cut their forecasts or lost sales since Wal-Mart outlined the plan to reduce inventory in its 3,800 U.S. stores. Wal-Mart, the world's largest retailer, is focusing on reducing inventory to reduce costs, Bloomberg said. Wal-Mart told analysts at a retail industry conference last month that the retailer wants to make the stores easier to shop in. Sign of the times?
***German DHL Behind The Curve ........ as the German firm Deutsche Post will continue to post losses in North America this year, after having previously forecast that it will be making money by the 4th quarter of this year, the Wall Street Journal reported April 12. The company, which owns delivery firm DHL, is losing about US$500M (half a billion) annually in its U.S. operations, according to the Journal. DHL said it has about 7% of the U.S. domestic express market, which is dominated by FedEx & UPS the Journal reported.
***DHL Prepares For Disaster ....... as it has announced the launch of its first Disaster Response Team (DRT), called the DHL DRT Asia Pacific, to be based in Singapore. DHL is a brand of Deutsche Post World Net. The DRT is the first product of DHL's strategic partnership with the UN System in the field of Disaster Management. The task of the DRT is to ensure that relief reaches people quickly by reducing bottlenecks at airports close to the scene of major natural disasters. DHL's Disaster Response Teams will apply their professional knowledge to organize the handling, warehousing & loading of relief goods at the airport for onward transportation. As a result, people in need receive relief supplies quickly. The DHL DRT Asia Pacific consists of a pool of 80 specially trained DHL experts, who, in addition to their normal jobs at DHL, have volunteered to take part in the DRT's humanitarian work. Teams will be deployed for a period of up to 3 weeks following a major natural disaster. By that point, the initial surge of Int'l charter aircraft bringing in aid supplies has normally decreased to a manageable level for the airport authorities and their local partners to handle. The next Disaster Response Team will be established in Miami to cover the Latin America & Caribbean regions. The Disaster Response Team's services are provided as an in-kind donation. Bravo to fixed logisitics relief programs. Next step, pre-coordinate with governmental agencies to fill official service gaps.
***DHL Exel Supply Chain Taps UK Distribution Market ....... as it has opened a 40,000 square meter distribution center that it will manage on behalf of Unilever UK Foods, in Cannock, in the Staffordshire county of the UK. The new site employs 200 people to store, pick, repack & dispatch brands such as Hellmann's, PG Tips, Knorr and Lipton around to 2,000 stores nationwide. The co-packing market in the U.K. is estimated to be worth US$1.78Bn each year. Germany's Deutsche Post, Europe's largest postal service & owner of DHL, bought U.K. logistics company Exel for US$6.9Bn in Dec. The enlarged logistics unit now operates under the DHL brand.
***BNSF Railroad Lays Track To China ........ as it will become the 1st U.S. railroad to have a presence in China when it opens a representative office in Shanghai in the 2nd quarter. BNSF said its Int'l intermodal business, most of which originates in China, has grown at a compound annual growth rate of more than 13% since 2000. BNSF has had a presence in Asia since the early 1970s when it and its predecessor railroads opened offices in Japan. No bridges were involved.
***Canadian National Railway Co. Expands Southern Hub ....... as it will spend US$100M to improve its 345-acre Johnston Yard freight train switching facility in Memphis, TN. The work is expected to be completed for late 2008 when it will have a capacity of more than 3,100 freight cars. It will have 45 tracks in the classification yard, three 10,000-foot departure tracks, & eight 5,000-foot receiving tracks. When the reconfigured yard is in operation, it will be able to handle 35 or more freight trains per day.
***Goodbye CNF, Inc ........ as its shareholders have approved management's proposal to change the US$4.2Bn freight transportation & logistics company's name to Con-way Inc. Shares of the company on the New York Stock Exchange now trade under the new ticker symbol of CNW. The company also has begun a rebranding initiative to introduce a new Con-way logo.
***Electronic Clock Ticking On The Border ....... as more cross-border motor carriers are getting ready to file electronic manifests before the U.S. Customs & Border Protection makes such filing mandatory as early as Aug. The number of qualified trucking fleets more than tripled in 6 months, to 688 in March from 198 last Sept., said a public affairs specialist for U.S. CBP. However, many companies are waiting to see what develops, believing time will be extended. It likely will.
***FedEx Freight Boosts Rates ..... as it implemented a 5.95% general rate increase on April 24 for its less-than-truckload services in the U.S. & between the U.S., Mexico & Canada. Expect this across the board. Read More
***Hoosier Deliveries Rescheduled ....... as Indiana last weekend began observing Daylight Saving Time for the 1st time in more than 30 years -- making it the 48th state to observe daylight time. Hawaii & most of Arizona are the only holdouts on the 21st Century.
***Schneider Logistics, Inc. Smooths Canadian Lane ........ as it has now begun AccessCanada, a new service offering that helps U.S. exporters to Canada reduce cost in the supply chain. The new service delivers simplified, cost-reducing access to the Canadian marketplace. With AccessCanada, Schneider combines truckload, crossdock warehousing and less-than-truckload services to expedite freight delivery into Canada without tying up shipper inventory or capital in warehouses. To reach shippers' destinations in Canada, freight is delivered from a distribution center, manufacturing facility or import warehouse in the U.S. to a crossdocking facility in Canada. There, freight is divided into smaller shipments for final delivery by less-than-truckload carriers to door.
***Pallet Jack ....... as U.S. immigration agents on April 19, arrested 7 current & former managers of IFCO Systems North America Inc., the nation's largest provider of pallet logistics services, in a nationwide sting on illegal aliens that also netted more than 1,100 of the company's employees. The IFCO officials were charged with conspiring to transport & harbor undocumented workers, inducing them with jobs to enter the U.S. The charges carry penalties up to 10 years in prison and a fine of up to US$250,000 for each case involving an illegal alien. Law enforcement authorities also apprehended 1,187 illegal workers during searches at more than 40 IFCO plants and offices in 26 states. Houston-based IFCO specializes in supplying and managing a pool of 75 million plastic reusable containers primarily used to transport fresh produce to grocery retailers. IFCO also manufactures & manages the distribution and return of wooden pallets used in the warehousing & transportation industry.
***Transporting Ourselves ....... as Dave Givens drives 370 miles to work & back every day and considers his 7 hour commute the best answer to balancing his work with his personal life. The winner of a nationwide contest to find the commuter with the longest trek, Givens is one of millions of people who are commuting longer and farther than ever before. Givens, a 46-year-old electrical engineer, has an extreme commute between home in Mariposa, California, and his job in San Jose. He leaves home before dawn & returns after dark. His trip landed him 1st place among almost 3,000 entries in the search for America's longest commute. Studies show 7.6% of U.S. commuters traveled more than an hour to work in 2004, the most recent data available, up from 6% in 1990. The average one-way commute grew by 13% to 25.5 minutes between 1990 & 2000. Still, someone needs to clue Dave.
***Sword Swallowing ....... as Danish police said on April 20, they had found heroin worth more than US$1M that had been smuggled into the country from Pakistan in the hollowed-out blades of 25 antique sword replicas. Detectives found 740 grams of heroin of 70% purity in the engraved blades of the decorative swords. "The blades were the last place we thought to look and it was a surprising place to find the drugs," Ole Wagner of the Drugs Squad told Reuters. He believed at least 5 more swords had reached Denmark earlier this year.
2. The Cargo Letter Financial Page ______
**AMR Corp. (parent of American Airlines) IMPROVED with 1st quarter net loss of US$92M, compared to a net loss of US$162M in same quarter 2005.
**Atlas Air Worldwide Holdings. SAME with earnings of$27.5M or US$1.32 a share in 4th quarter of last year.
**Cargolux. UP with net income of US$89.4M last year, a 7.1% increase compared to 2004, thanks largely to a US$12M capital gain from the sale of its interests in Champ Cargosystems S.A to SITA.
**China Shipping Container Lines. DOWN with a 10.8% decline in its 2005 net profits to US$447M.
**CMA CGM. UP as net profit increased 13% in 2005 to 467 million euros (US$575M) from 415 million euros in 2004.
**Continental Airlines. IMPROVED with net loss of US$66M in 1st quarter, an improvement over the US$186M net loss in same quarter 2005.
**Covenant Transport. DOWN with a loss of US$884,000 or 6 cents a share in the 1st quarter, compared with a US$649,000 or 4-cent loss a year earlier.
**CSX. DOWN as net earnings for the 1st quarter 2006 dropped 58% to US$245M, from US$579M a year ago.
**El Al. UP as net income for 2005 increased by 94% over the previous year to US$64.1M.
**J.B. Hunt Transport Services. UP with a record US$49M or 31 cents a share in Q1, up from US$47M or 29 cents a year ago.
**Hub Group. UP with 1st quarter profit of US$9.1M or 44 cents a share, up from US$5.3M or 25 cents last year.
**Interpool Inc. UP as 2005 net income was US$60.5 million or US$1.94 per share, compared with US$7.9M or 27 cents the previous year. Interpool Inc. is corporate sponsor of The Cargo Letter Archive.
**Kuehne & Nagel. UP as net income in 1st quarter jumped 46.2% to US$80M.
**Landstar System. UP with a record 1st quarter profit of US$24.4m or 41 cents a share, up from US$16.8M or 27 cents a year earlier.
**Swift Transportation Co. (FTL). UP with net income of US$37.5M or 50 cents a share in the 1st quarter, up from US$19.4M or 26 cents a year earlier.
**United Arab Shipping Co. DOWN with a 9.4% decline to its net profit for 2005 to US$115.3 million.
**Union Pacific Corp.(largest North American railroad) UP with best ever quarterly results with a net income of US$311M in 1st quarter, up 143% from US$128M a year earlier.
**United Parcel Service. UP with a 10.5% jump in 1st quarter net income to US$975M, compared to US$882M last year.
***YRC Worldwide Inc. Invests In Self ....... as the company formerly known as YellowRoadway, has approved a stock repurchase program that authorizes the company to repurchase up to US$100M of its common stock. The company is parent to YRC Regional Transportation, which comprises New Penn Motor Express and the USF companies, USF Holland, USF Reddaway, USF Bestway & USF Glen Moore.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ___
***Cathay Pacific Takeover Speculation ......... as corporate owners Air China, Cathay Pacific, China National Aviation Co. (CNAC), CITIC Pacific and Swire Pacific have reacted to speculation concerning potential takeover activity by issuing a joint statement at the request of the Hong Kong Stock Exchange. The South China Morning Post had reported that Swire Pacific Ltd, Cathay Pacific's majority shareholder, was close to an agreement to sell the Hong Kong-based airline to Air China. The newspaper also reported that Cathay Pacific would first buy local competitor Dragonair and then be included as a part of the mainland group. The companies said they "confirm that discussions are taking place about operational cooperation between Cathay Pacific and Air China and about the realignment of shareholdings in Cathay Pacific, Air China & Dragonair. However, there is no agreement or arrangement which is disclosure under the listing rules." Translation: the deal may be about done.
***Narrow China Path ...... as the Chinese Government has approved a new Int'l flight route over the country that will potentially reduce flight times between China & Europe by an average of 30 minutes. The Y-1 route, also known as IATA-1, covers Sadan to Ombon and is an alternative to L888 just north of the Himalaya Mountains. Airlines using L888 need to be specially retrofitted for the high terrain with additional oxygen equipment while the Y-1 (IATA-1) route does not require similar special equipment. Geneva-based Int' l Air Transport Assn. estimates that the new route will eliminate 2,860 hours of flight time, 27,000 tons of fuel consumption, 84,800 tons of carbon dioxide emission, 340,000 kilos of nitrogen oxides emission annually and result in US$30M in savings of airlines fuel. Only 30% of Chinese airspace is available for civil aviation.
***February Cargo Volumes Mixed ...... as the Geneva-based Airports Council Int'l (ACI) said Intl air cargo shipments in Feb. increased 5.4% to 2.6 million metric tons. The ACI reported that North America's Int'l volumes were down 1.7% to 358,800 metric tons, while volumes in Europe rose 4.9% to 634,400 metric tons. Volumes dropped 1.5% in Latin America and the Caribbean to 97,600 metric tons. Middle East volumes improved 10.5% to 185,900 metric tons with Asia-Pacific cargo up 7.2% to 1.2 million metric tons. Africa volumes showed the highest growth with a 28.8% surge to 33,800 metric tons.
***Big India ....... as the proposed merger of Air India and Indian Airlines, would create a single national carrier with revenue of US$3Bn & a fleet of 130 planes, the Hindustan Times said. Air India has 46 planes, but has ordered 68 new planes from Boeing and will phase out 40 of its oldest ones. Indian Airlines has 70 planes and has 43 Airbus jets on order.
***The "Two Chinas" Join In Venture For Beantown ....... as Yangtze River Express Airline, the cargo subsidiary of Shanghai-based Hainan Airlines Co. Ltd., will launch direct Boeing 747 service between Shanghai & Boston this summer. The airline chose Boston because trade between New England and China is growing, but currently there is no direct service on that trade lane. Shippers will save money by using Yangtze River's flights instead of trucking cargo to & from New York, the airline said. Hainan Airlines is China's 4th largest airline. Yangtze River Express is a joint venture between Hainan Airlines & Taiwan's China Airlines ....... the "Two Chinas" at their best ... a long commercial evolution since 1949.
***Continental Airlines & Alitalia Join ...... as they have started a codeshare agreement that allows the airlines to offer flights within the other's home country. The airlines are both SkyTeam alliance members.
***Kitty Hawk More Grounded ....... as it has formed a new wholly owned subsidiary, Kitty Hawk Ground, Inc., to manage its growing scheduled airport-to-airport LTL ground network.
***Ethihad Crystal Cargo Turns 2000 ...... as it has become the 1st Middle Eastern cargo airline to join Cargo 2000, an air carrier & freight forwarder program that reduces steps in the air cargo transport chain. Ethihad carried 20,000 tons in 2004, increasing that amount by 400% in 2005 with revenues of about US$100M.
***Volumes >>> American Airlines flew 191.1 million system cargo ton-miles in March, a 1.9 % decrease compared to the 194.8 million system cargo ton-miles carried in the same month last year. >>> British Airways carried 457 million cargo ton-kilometers in March, up 3.5 % compared to 442 million cargo ton-kilometers transported in same month last year. >>> Cathay Pacific carried 106,612 tons of cargo in March, up 10.1% from same month in 2005. >>> Continental Airlines transported 98.9 million cargo revenue ton-miles in March, an increase of 5.5% compared to 93.7 million a year ago. >>> LAN Airlines cargo traffic for March increased 17.1% as capacity rose 18.5%. >>> Lufthansa Cargo transported 410,000 tons of freight and mail in 1st quarter of 2005, down 1% compared to 415,000 tons last year >>> United Airlines reported a 1.7% increase in cargo volume for March at 187.4 million system cargo ton-miles.
***U.S. Post Office Inaugurates 50 Year Air Express Service Level ....... as a postcard sent from a Stetson, Florida home to a man in Riverside, Calif., was returned April 13, with a "return to sender" stamp &emdash; and its 1956 postmark. Mack McCormick, 59, did not send the postcard, but he lives in the home where the postcard originated. It was delivered to his mailbox. He used the Internet to track down the author of the note, George Hitz, 64, who now lives in Sudbury, Mass. It is unlikely the postcard spent the last 50 years in a DeLand post office, said a U.S. Postal Service spokesman for Central & North Florida. Officials stress that the new service will not include Saturday delivery.
***Overloaded & Underdressed....... as Indian low-cost airline Air Deccan suspended a pilot after he was found drunk shortly before he was due to fly an aircraft with 100 passengers on board, officials said April 12. Capt. N. Ronaldo, a South American pilot was to fly the aircraft from Mumbai to the eastern city of Kolkata. The surprise inspection at Mumbai airport -- India's busiest -- uncovered several minor violations of safety norms by airlines, including an instance of a pilot in another low-cost carrier trying to fly in a T-shirt because his only uniform had gone to the laundry. India's civil aviation sector has expanded rapidly in the past 3 years with several new private airlines looking at home & abroad for new pilots. Geez, we'll stick with Air India.
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
***Big Salute To "Thinking Inside The Box" ....... as an official Gala Celebration marking the 50th anniversary of containerization will be held on April 27, at the Smithsonian Institution, National Museum of Natural History, in Washington, DC. It was on April 26, 1956, that the converted tanker SS Ideal-X departed Newark, New Jersey en route Houston, Texas carrying 58 aluminum truck bodies in frames installed atop its deck. Malcolm McLean, a former truck company owner, had determined that goods could be shipped less expensively if they were first loaded into standardized containers that could be loaded on ships, trucks, or trains. The rest, as they say, is history. When Malcolm McLean decided to load truck trailers directly aboard ships, he started the ball rolling on an idea that would revolutionize global logistics.
They are simple steel boxes, 20 or 40 feet long and 81/2 feet high, with a pair of doors at one end & a wooden floor - truck trailers without wheels. Who would have thought such an ordinary creation would change the world? The "box" altered the future of nations when manufacturing operations, chasing lower labor costs, sprouted throughout Asia, particularly in China. Last year, the U.S. imported 7.7 million containers carrying contents valued at US$784.4Bn. Today, about 15 million containers roam the globe, according to the Institute of Int'l Container Lessors. American trucker, Malcolm McLean changed the world.
*World's First Containership, Ideal-X
*"The Box that Changed the World" ......... new book explores the history -- 50 years this month -- of the ubiquitous ISO container
***Somalia Has Had Enough Piracy -- Welcome U.S. Navy! ....... as it granted the U.S. Navy permission to patrol its coastal waters in an effort to combat piracy off the lawless Horn of Africa nation -- the United States would help the transitional government secure Somalia's 621-mile (1,000km) coastline. The agreement was reached during talks with U.S. ambassador in Kenya, March 15, the U.N. Security Council having encouraged naval forces operating off Somalia to take action against piracy. Piracy was up sharply last year off Somalia, with the number of incidents rising to 35, compared with 2 in 2004. The Somalian government, what there is of it, also reportedly asked the U.S. Navy to assist with building a new coast guard service for the country. Read about the Somali Pirate Patrol -- Task Force 150 (see March 2006) -- a little known multi-national force that is on the seas tonight.
***Joining To Fight High Seas Piracy ........ as South Korea, India, and Sri Lanka have signed the Regional Cooperation Agreement on Combating Piracy & Armed Robbery against Ships in Asia (ReCAAP). ReCAAP is a Japanese initiative for anti-piracy cooperation amongst the ASEAN countries. To date, 11 countries have signed the agreement, of which 7 have ratified, namely Japan, Laos, Singapore, Thailand, the Philippines, Myanmar and the Republic of Korea.
***Containing The Menace ...... as the U.S. Treasury Dept.'s Office of Foreign Assets Control will amend its regulations, effective May 8, to prohibit U.S. citizens from owning, leasing, operating or insuring any vessel flagged by North Korea. The U.S. has maintained economic sanctions against North Korea since 1950.
***SOS For SOS? ....... as the National Retail Federation (NRF) has urged a congressional committee to reject H.R. 4899, the Sail Only if Scanned Act, or SOS Act that would require "scanning" of all cargo bound for U.S. ports, saying the term was not adequately defined and that the proposal could result in costly delays that would harm the nation's economy. "Efforts to require 100% scanning of U.S.-bound containers are operationally infeasible and would likely cause unacceptably high economic costs and disruptions to the nation's commerce," said the NRF. NRF noted that the Nadler bill does not detail who would perform the scans or even define the word scan -- which could mean any number of things -- a scan using X-ray equipment, a full gamma ray scan such as the Vehicle and Cargo Inspection System, or the Integrated Container Inspection System used in Hong Kong. If containers cannot be scanned at feeder ports, the legislation could effectively require that they be unloaded off a vessel, scanned and reloaded at major ports such as Hong Kong or Singapore before heading to the U.S., NRF said. The World Shipping Council outlined similar concerns with the proposed bill.
***Plugging Oakland Security Gaps ....... as the U.S. Coast Guard, in an effort to plug several security breaches at the Port of Oakland last fall, has put the West Coast longshoremen's union on notice to quickly accept negotiated measures to control access to port facilities or face much stricter government-imposed security rules. Local representatives for the Int'l Longshoremen & Warehouse Union (ILWU) agreed in March to a plan for members to present at marine terminal gates identification cards and their reason for business on the docks, but has been too slow getting ILWU headquarters to sign off on the plan, according to Capt. W.J. Uberti, Captain of The Port & Federal Maritime Security Coordinator for Oakland. The Coast Guard determined that ships were not checking identification as required and that access control measures at the Oakland terminals were not adequate. The agency instructed facilities to immediately strengthen their security plans and convened the Area Maritime Security Committee, which includes government & industry stakeholders, to find ways to further close the gap in security. The Coast Guard & the Transportation Security Administration have been working on a universal Transportation Worker Identification Credential with biometric information about the cardholder once the program is implemented, now scheduled for sometime next year.
***Little City State That Could ...... as the port of Singapore is beating Hong Kong in the race for world's busiest port as the Maritime and Port Authority of Singapore reported the South East Asian port handled 1.76 million TEUs in Feb., compared to 1.52 million at Hong Kong.
***Singapore Joins To Battle Terrorism ...... as it has agreed to cooperate with the U.S. in its Mega Ports Initiative, which seeks to place monitors in major ports around the world, reports HK Shipping Gazette. The Mega Ports Initiative, launched by the U.S. Dept. of Energy, aims to work with foreign governments to deter, detect and interdict illegal shipments of nuclear weapons. Screening would not mean opening and inspecting, but rather getting information about what's in the container to make a risk assessment of what may be a high risk shipment.
***M/V MOL Initiative Declares GA ....... as MOL Euro-Oriental Shipping S.A., owners of the container M/V MOL Initiative, have declared General Average, following a fire in the engine room of the vessel on April 3 off the coast of Japan. The vessel, deployed on the New World Alliance's weekly Asia/U.S. East Coast/U.S. West Coast APX service, was on voyage from Oakland to Tokyo. The fire was completely extinguished April 9. The incident did not cause any injury or pollution, MOL said. Following the declaration, MOL is required to hold cargo pending authority to release from their appointed General Average adjustors, Asai & Ichikawa of Tokyo. There will be a requirement to post separate salvage security to the salvors at the completion of the salvage operation. Consult your cargo insurance broker. This is yet another reason to carry quality marine cargo insurance. GA Adjusters:
***Hello New "Emirates Shipping Line" ...... as a startup company headed by former Norasia CEO Vikas Khan, has officially opened for business. The company is registered in Dubai with commercial headquarters in the United Arab Emirate-state & Hong Kong and is thought to be starting a service using 3,000-TEU ships between the U.S., India, Middle East & the Mediterranean.
***Dubai Ports World Loses Again ........ as Singapore state-owned global terminal operator PSA Int'l, recently outbid by Dubai Ports World for the takeover of British company Peninsular & Oriental Steam Navigation Co., has agreed to buy a 20% stake in Hong Kong-based rival Hutchison Port Holdings, the world's largest port operator, for US$4.4Bn in cash. PSA, the 2nd-largest global port operator, manages 19 port facilities in Singapore, China, Europe, India, Korea, Southeast Asia & Japan. Last year, the company handled 41.2 million TEUs. PSA reported net profits in 2005 of $653M.
***Feeling The Panama Need ...... as demand for the Panama Canal continues to increase, booking slots to transit the waterway are becoming more difficult to acquire, so the Panama Canal Authority has made available an additional booking slot to canal customers through a standard auction process. Bids for the additional slot became available for auction April 1 for transits beginning on April 4. The new system will be available for a trial period of 60 days. The additional booking slot will be auctioned on days when basic slots for either supers (91 feet or more in beam) or regulars (less than 91 feet in beam) have been sold out. The authority will publish the initial or base price to be used during the auction, which is based on the previous month's maximum booking for each category. The winner of the auction is subject to pay applicable tolls, in addition to the auction bid.
***Filling The Panama Need .......as the Panama Canal Authority is ready to unveil a US$7.5Bn plan to widen the Panama Canal. The authority is proposing to build a third set of locks capable of accommodating 10,000-TEU ships up to 19 containers wide with 50 feet of draft. The Int'l Monetary Fund estimates the cost of the project at US$7.5Bn, which is likely to take seven years to complete, the BBC has reported. To help finance the project, the authority last year changed its toll pricing and measurement system, which will see fees rising to US$54 per TEU as of Jan. 1, from about US$30 per TEU at the end of 2004.
***Family Feud Spins Box Giant ....... as Triton Container Int'l Ltd., the world's largest owner & leaser of intermodal cargo containers, is up for sale & could be worth as much as US$2.5Bn, Bloomberg has reported. Bloomberg news service said Goldman Sachs is seeking a buyer for the closely held Bermuda-based company, quoting 3 anonymous sources close to the family that operates Triton, who declined to be identified because a sale hasn't been announced. Reuters reported that an internal squabble among the Pritzker family, which owns Triton, is behind the sale.
***Jones Acts Vessels Slip Offshore ....... as General Dynamics NASSCO & Daewoo Ship Engineering Co. will work together to build ships for the U.S. coastal trades. The Jones Act requires ships that carry cargo between U.S. ports be built in the U.S. Under the agreement, Daewoo Ship Engineering will provide detail designs, support services and some of the material needed for vessel production. NASSCO will buy material and provide labor & facilities to build the ships in the U.S. The world has truly great shipyards, but it is a potential tragedy to see the U.S. lose its own.
***Maersk Allowed To Spot Wood Between U.S. Ports ...... as the U.S. Federal Maritime Commission has authorized Danish mega-carrier Maersk Line to charter space between ports in Washington State and Japan and Korea to Tacoma, Wash.-based Westwood Shipping Lines, the commercial marine subsidiary of integrated forest products company Weyerhaeuser Co. The Jones Act ordinarily requires ships that carry cargo between U.S. ports to be built in the U.S., but without much of U.S Merchant Marine there is little to do. Unfortunately, this ship may have sailed.
***Two Buck Chuck? ...... as CargoSmart Ltd., a provider of application & integration services for the ocean container transportation industry, has announced a pricing offer for ocean carriers of US$2 for each registered shipment managed through its portal. CargoSmart, which has 38,000 members, provides carriers with a low-cost self-service channel in addition to other portals and carriers' own Web sites.
***Port of New Orleans Hit Continues ....... as Hurricane Katrina translated into a 26% decrease in general cargo handled at the Port of New Orleans in 2005, according to port officials. General cargo includes cargo shipped in containers as well as breakbulk cargo, such as steel & rubber, transported on pallets. General cargo fell from 10.4 million tons in 2004 to 7.6 million tons in 2005, said the port.
***Port of Palm Beach Plans Intermodal Gateway ...... as the port is in the early stages of planning an inland intermodal terminal as a means of allowing port growth. Port officials say the proposed Inland Port Intermodal Cargo Industrial Complex would be built in western Palm Beach County on land now used for sugar cane cultivation. The terminal is being patterned after inland rail facilities for the Port of Savannah that have been developed to alleviate congestion near the container terminals. Port of Palm Beach has only 2 acres that are not under use, and the only place for additional development is away from exiting facilities.
***U.S. FMC Revokes 10 OTI Licenses ....... as for failure to maintain valid bonds, the firms include Accel Transport Co., Long Beach, Calif.; California Export Line, Irvine, Calif.; Cargomar USA, Norfolk, Va.; Centrum Overseas Transport, Fort Worth, Texas; Continental Logistic Service, Los Angeles; East West North South Forwarding, Miami; George Mario Luna, Howell, N.J.; La Costa Logistics Services, Carlsbad, Calif.; Robert A. Carranza, Los Angeles; & Xima Freight Services, Miami.
***Great Lady Will Continue To Serve ...... as the decommissioned aircraft carrier USS Oriskany (CVA 34) is now at Naval Air Station (NAS) Pensacola preparing for her final voyage. Known as the "Big O," the 32,000-ton, 888-foot Oriskany is schedule to be scuttled 22 miles south of Pensacola in approximately 212 feet of water in the Gulf of Mexico May 17, 2006, where it will become the largest ship ever intentionally sunk as an artificial reef. After the Oriskany reaches the bottom, ownership of the vessel will transfer from the Navy to the State of Florida.
***This Month In U.S. Navy History ........
1778 - Capt. John Paul Jones of USS Ranger leads a landing party raid on Whitehaven, England.
1848 - A Navy expedition to explore the Dead Sea and the River Jordan, commanded by Lt. William F. Lynch, reaches the Dead Sea.
1861 - The Civil War begins when Confederates fire on Fort Sumter, S.C.
1861 - USS Saratoga captures the slaver Nightingale.
1861 - Norfolk Navy Yard in Virginia is abandoned and burned by Union forces.
1898 - U.S. declares war on Spain.
1900 - The Navy accepted its first submarine, USS Holland (SS 1).
1909 - Cmdr. Robert E. Peary reports reaching the North Pole.
1912 - USS Chester (CL 1) & USS Salem (CL 3) sailed from Massachusetts to assist RMS Titanic survivors.
1914 - 1st combat observation mission by Navy plane, at Veracruz, Mexico.
1947 - Navy Capt. L.O. Fox, supported by 80 Marines, accepted the surrender of Lt. Yamaguchi and 26 Japanese soldiers & sailors, 2.5 years after the occupation of Peleliu & nearly 20 months after the surrender of Japan.
1955 - USS Albany (CG 10) & USS William Wood (DD 715) begin to provide disaster relief to citizens of Volos, Greece.
1988 - USS Samuel B. Roberts (FFG 58) strikes an Iranian mine off Qatar.
***Remembering America's Great Texas City Port Disaster -- 60 Year Anniversary ....... as in April 16, 1947, one of the worst harbor disasters in the U.S. commenced when the French freighter SS Grandcamp, loaded with a cargo of ammonium nitrate fertilizer, caught fire & exploded at Texas City. The next day, the nearby ship SS Highflyer exploded. In the then small town of Texas City (pop. approx. 15,000) over 500 people died, 200 were never located, and many became homeless due to the fires. Most members of the local volunteer fire department were killed while responding to the fires & explosions. Reports of the U.S. Coast Guard with amazing photos:
***Saga of The Filipino Seamen ..........as 180,000 Filipino seamen or 28.5% of the total maritime population of 632,000 are working worldwide. In 2001 alone, Filipino seafarers remitted US$2.3Bn to the Philippines, making them one of the country's biggest dollar earners. A Must Read Story at this link:
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 April 2006: "Mis-Fortune" -- continuing coverage with an expert on-scene of M/V Hyundai Fortune, afire in the Gulf of Aden. No other news organization has such an on-scene expert. But now, there is no other news source for the "Fireworks" controversy.
See our other feature for April 2006: "A Day At The Beach" -- continuing photo coverage of M/V APL Panama, which grounded at Ensenada, Mexico -- floated free on March 10. Unique coverage you will see nowhere else.
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..............
Australia &endash; Piracy & Armed Robbery Against Ships
Bringing RFID To Life
Dept. of Justice's Inspector General Report -- The U.S. Coast Guard & The FBI .......... they just don't work well together.
First Commercial Tilt Rotor Aircraft ......... expect vertical cargo delivery.
IMO Circular Summarizing Stowaway Reports In 1st Quarter of 2006
JAL Round-the-World Global Explorer Fares
Legal Dangers of Taking Interview Notes
MARAD -- Short Sea Shipping
Scotland Yard Truck Theft Daily Alerts
The Littoral Combat Ship
The New Supply Chain Technology Footprint
The Word "Bomb"
"Tour of the Port of Philadelphia"
U.S. Customs and Border Protection (CBP) Criteria & Application For C-TPAT Program .......... all modes & professions listed.
U.S. Navy Cargo Handling Battalion Training
Will China Shift From Industry to Innovation? ...... the next wave.
Cell Phone GPS
"Flowcasting The Retail Supply Chain"
Hazmat Drivers: Training for Safe Transport
Keller-Soft Human Resources Information Manager ........ FREE 30-day demo.
Know Your Ships 2006 ............ Guide to Boats & Boatwatching on the Great Lakes & St. Lawrence Seaway
Pallet Dispenser Gently Handles Damaged Pallets
RFID-enabled stretch wrapper
World Trade Organization Events
15th Annual Int'l All Cargo Conference IAAC .......... 23-25 May 2006, Houston
2007 World Ports Conference .........27 April-04 May 2007, Houston, TX.
Air Cargo India 2006 ........ Nov. 16-18, 2006, World Trade Center in Mumbai.
Council of American Master Mariners 2006 Conference ..........8 - 10 May 2006, Los Angeles Harbor Hotel, Los Angeles
Council of Supply Chain Management Professionals .......... 15-18 Oct. 2006 Henry B. Gonzalez Convention Center, San Antonio, Texas
Freight Russia 2006 ......... 24 - 26 Oct. 2006, Expocentr, Moscow, Russia
Global Automotive Logistics 2006 ......... 17- 18 Oct. 2006, Hilton, Antwerp, Belgium
I Foro Global De Logistica Y Comercial Internacional .........9 & 10 May,2006, Panama
Intermodal Exhibition & Conference 2006 ........... 5 - 7 Dec. 2006, Hamburg Messe, Hamburg, Germany
Logistics & Supply Chain Forum ....... May 7-10, 2006, aboard M/V Norwegian Dawn, Ex-NYC.
Los Angeles Harbor Transportation Club Golf Tournament ............ Friday May 26th, 2006, California Country Club, a great event!
National Maritime Day ........... May 22, 2006
RORO 2006 .......16-18 May 2006, Flanders Expo, Ghent, Belgium
Shipbuilding-Machinery & Marine Technology Int'l Trade Fair ..........Sept. 26-29, 2006 -- Hamburg, Germany.
TOC2006 Americas ......24 - 26 Oct. 2006, Fairmont Princess, Acapulco, Mexico
Transtec 2006................ 25-28 Sept. 2006,Int'l Euro-Asian conferences on transport, St Petersburg, Russia
U.S. Dept. of Transportation, Federal Highway Administration ......... free freight in May 2006, Webinars
U.S. Navy Customs Border Clearance Agents
USS Midway for Casino Night ........Friday, May 26, 2006, San Diego Aircraft Carrier Museum
Australian Fish Names
Catalina Express Celebrates 25th Anniversary
"Design Dale's Ride" Coloring Contest .......... children age 5-12, here is your big chance to design this year's The UPS Store/Toys for Tots #88 Ford, which NASCAR legend Dale Jarrett will race Nov. 5 at Texas Motor Speedway!
How To Cast Spells ....... visit at your own risk.
New Theme Park Rides for Summer 2006 Adventure
Save The Albatross ..... not for fun -- needs your help!
Signal Flag Text Translator
OUR "E" Section: The Forwarder/Broker World***
7. New U.S. Transport Related Legal Cases ____
St. Paul Surplus Lines Insurance Co. v. Halliburton Energy Services, Inc.
U.S. 5th Circuit Court of Appeals
April 10, 2006, No. 05-30614
Indemnification Under Service Contract -- The court ruled that the indemnification provision in a maritime service contract requires a party to indemnify the other party with regard to a personal injury claim brought by an employee of the 1st party against a subcontractor of the 2nd party. In the instant case, defendant hired plaintiff's insured to develop an offshore energy property. The service contract included a broad indemnity provision. Plaintiff's insured then hired a 3rd party to provide a drill barge for some of the work. This 2nd contract included a similar indemnity provision. One of defendant's employees was injured while on the drill barge and brought suit against the 3rd party. Plaintiff reimbursed the 3rd party for the personal injury claim & sought its own reimbursement from defendant. Defendant argued that the service contract did not cover this claim since it was not directly against plaintiff's insured. The court held that, under the conduit theory, the broad indemnity provision in the service contract allowed the third party claim to flow through plaintiff's insured & ultimately to defendant. OPINION
Len v. American Overseas Marine Corp.
U.S. 5th Circuit Court of Appeals
April 6, 2006, No. 05-30662
Exclusive remedy for crewman injured on public vessel is against U.S. as the court ruled that exclusive remedy for a crewman injured on a public vessel is against the federal government. In the instant case, plaintiff seaman was injured while cleaning gun barrels onboard a public vessel that was operated by a contract company. After waiting more than two years to file suit (thus overrunning the statute of limitations under the Public Vessels Act), plaintiff brought suit against the contract company. Plaintiff asserted that he should be allowed to proceed with his action because the remedy that he might have had against the government no longer existed due to the statute of limitations. The court held that, where the Public Vessels Act provided a remedy, there is no right to bring an action against the agent of the U.S. OPINION
Harrell v. United States
U.S. 10th Circuit Court of Appeals
April 6, 2006, No. 05-3179
U.S. Coast Guard not liable for unknown buoy discrepancy for personal injuries caused when a person floating down the Missouri River on an inner tube collided with a buoy that had sunk below the surface due to high water. Court held that there is no law or regulation directing how often buoys should be serviced and that establishment of the servicing schedule involved the use of discretion in the allocation of scarce government resources. The federal government is immune from liability under the Suits in Admiralty Act based on the discretionary function exception. OPINION
MacDonald v. Kahikolu Ltd.
March 31 2006, No. 04-15979, District of Alaska
Jones Act / Negligence Per Se -- Christopher MacDonald worked as a deckhand on Kahikolu Ltd.'s (Kahikolu) Frogman charter boat business. MacDonald was occasionally required to perform free dives, which are dives that do not use scuba gear. MacDonald sustained an injury that left him with severe hearing loss. MacDonald claimed that Kahikolu's failure to provide an operations manual on the boat, as required by the Coast Guard's scuba diving regulations, was a factor in the injury. In addition, he claimed that evidence of Kahikolu's violation of Coast Guard regulations per se created liability for negligence under the Jones Act, 46 App. U.S.C. sec. 688. The district court found that MacDonald was not engaged in inherently dangerous work and that MacDonald had knowledge and experience in this area of diving. The district court held that there was no negligence per se because the Coast Guard regulations do not apply to free dives, but only to commercial scuba divers. The Ninth Circuit first held that in order to prove negligence under the Jones Act, MacDonald was not required to prove that he was an intended beneficiary of Coast Guard regulations. The 9th Circuit next held that, under the Jones Act, an employer can be per se liable for negligence if the violation of the Coast Guard regulations played any part in the injury, no matter how small. The 9th Circuit added that if an employee can prove that the violation played a part in his injury, he is entitled to damages. Vacated & Remanded. 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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