Law Offices of Countryman & McDaniel
THE CARGO LETTER 
Air & Ocean Logistics - Customs Broker News
31 October 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 what happened during August 2006 for our industry.
There was no The Cargo Letter in Sept. 2006 as we journeyed to Shanghai for the FIATA World Congress 2006. We're now back from China to bring you this edition -- just as the roads around our LAX home will now be partially shut down over next weeks for filming of the next "Die Hard" movie from Bruce Willis. We should have stayed in Shanghai! But anyone visiting Shanghai would agree that this city may be the New York of the 21st Century. Hold your breath for Shanghai.
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
To help you find what you need -- FAST -- there's now a transport search engine installed at our Cargo Law.com website!
Contribute your knowledge, stories & company information.......by e-mail to The Cargo Letter. We strive to bring you useful information which is timely & topical. Be sure to visit our website.
Our corporate sponsor &endash;- Interpool, Inc. -- named again to Forbes "Best 200 Small Companies" List -- for the 2nd consecutive year! -- http://www.interpool.com/The Cargo Letter Archives of Past Issues
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 LAX Webcam .... as we welcome you 24 hours a day to our home -- Runway 25, Right.
***U.S. Transport ID Plan Hits Another Wall ...... as the U.S. Government Accountability Office recommended that before rolling out its Transportation Worker Identification Credential, or TWIC card, in the maritime sector the agency should "develop & test solutions to problems identified during (earlier) testing to ensure that key components of the program work effectively." An assessment by an independent contractor "found deficiencies with TWIC program testing and recommended ... additional testing," says the report, completed at the end of September but released only last week. It said the Transportation Security Administration "plans no additional testing of the TWIC program," although it had taken other steps to deal with the issue. Maritime industry executives have complained that the tests the agency did employed a different technology than the one they eventually chose for the program, and believe the kind of swipe card readers officials opted for in the end will not work well in the hostile maritime environment. The Transportation Security Administration is delaying the rule that would require the card readers installed, saying it will work with industry to reach a solution.
***U.S. Indusrty Deaths Rise ...... as transportation fatalities in the U.S. increased last year, according to preliminary figures released by the National Transportation Safety Board (NTSB). Deaths from transportation accidents in the U.S. in 2005 totaled 45,636, up from 45,092 in 2004. This does not include Int'l losses.
*Highway transportation, which by far accounts for the largest portion of fatalities, rose to 43,443 in 2005 from 42,836 in 2004.
*Airline fatalities increased from 14 to 22, while air taxi deaths dropped sharply from 64 in 2004 to 18 last year.
*Rail fatalities decreased from 816 in 2004 to 789 in 2005, with declines reflected in both the intercity & transit categories.
*Marine deaths (not including recreational boating) showed a slight increase from 765 in 2004 to 769 in 2005.
*Recreational boating deaths, the largest marine category, jumped to 697 from 676.
*Cargo transport fatalities dropped substantially to 12 in 2005 from 26 in 2004.
***11th Annual Third-Party Logistics Study 2006 ......... as there is special focus on the use of 3PLs in emerging markets, particularly China. Capgemini's annual study of the third-party logistics industry confirms that China is the key country for growth in Int'l sourcing & trade. The study also shows declining satisfaction around 3PL providers' IT capabilities. Results from previous years have indicated a gradual decrease in the satisfaction rate and this year it reached an all-time low. Only 35% of 3PL customers say that they are satisfied with their 3PL providers IT capabilities. This is a significant drop from 2003 when 75% of North America respondents indicated they were satisfied. This decline is cause for concern because 92% of this year's respondents say that IT capabilities are a necessary element of 3PL provider expertise. Read the study
***Peru Free Trade ...... as President Bush said the U.S. remains committed to a expanding free trade with Peru. Bush made this commitment in a statement together with Peruvian President Alan Garcia in Washington, Oct 11. The so-called U.S.-Peru Trade Promotion Agreement promises to strengthen bilateral trade between the U.S. & the South American country. At the same time, the Bush administration vowed to continue supporting Peru's efforts to dismantle drug cartels & other criminal operations operating within its borders.
***Vietnam Approaches Accession ....... as the World Trade Organization (WTO) has announced that the WTO members negotiating Vietnam's terms for accession to the trade organization completed negotiations on Oct. 26. Documents which detail Vietnam's commitments & rights will now go to a vote of the full membership of the General Council on Nov. 7, 2006.
***World FDI Flows To China ...... as Hong Kong retained its position as Asia's 2nd largest destination for foreign direct investment (FDI), according to the World Investment Report 2006 released by the UN Conference on Trade& Development. Mainland China retained its No. 1 ranking. Together, Hong Kong and the mainland accounted for more than half of FDI inflows in the region last year. The report found that global FDI inflows rose substantially in 2005 for the 2nd consecutive year, reaching US$916Bn, up 29% from 2004. The report said FDI grew in all sectors, with services remaining the dominant sector. By contrast, the share of the manufacturing sector in the total fell in 2005. Asia remained the largest recipient of FDI among developing regions. Mainland China again led Asia, with US$72.4Bn in 2005. FDI flows to Hong Kong increased 5.6% to $35.9Bn. Hong Kong's FDI inflow was greater than the total of the next 3 largest FDI recipients in Asia -- Singapore (US$20.1Bn), South Korea (US$7.2Bn) and India (US$6.6Bn).
***Customs Rulings Online ....... as U.S. Customs & Border Protection (Customs, CBP) offers importers an on-line database that allows users to research Customs rulings at no charge. Binding rulings are one method that Customs uses to provide official legal guidance to importers and other interested parties on specific Customs issues, including valuation, marking and tariff classification. The Customs Rulings On-line Search System (CROSS) is a searchable database of 134,750 Customs rulings which can be retrieved using keywords & Boolean word search terms. CROSS has the added functionality of cross-referencing rulings from the initial search result set with their modified, revoked or referenced counterparts.
Rulings & Regulations
Customs' Ruling Letters
***CBP Sets New Bonding Requirements ....... as U.S. Customs & Border Protection has published new criteria for setting continuous bonds for special categories of merchandise at high-risk for default due to antidumping or countervailing duties. A company's bond will be set based on the overall industry's payment compliance history, the similarity to previous imports or industries experiencing uncollected revenue problems, the payment history, and indications that liquidated duty rates may exceed existing security. Read the new rules.
***Customs Paper In Decline ...... as by Nov. 13 U.S. Customs & Border Protection said it will discontinue the practice of issuing paper copies of permits to transfer to the trade community for containers designated for CBP examinations at any Centralized Examination Station (CES) in Southern California.
***End of The Softwood War ....... as the U.S.-Canada Softwood Lumber Agreement entered into force on Oct. 12, 2006. Now both the U.S. & Canada will begin to implement their obligations under the agreement. For Canada, based on current market prices for softwood lumber, this will require the immediate collection of an export tax. With respect to the U.S., this will result in revocation of the antidumping and countervailing duty orders on softwood lumber from Canada, an end to the collection of duty deposits on imports of Canadian softwood lumber, and the initiation of the process to refund duty deposits currently held by U.S. Customs and Border Protection. The Softwood Lumber Agreement was signed in Ottawa On Sept. 12, 2006.....the end of a long war...... and the closure of many Countryman & McDaniel legal files.
***Greater Vision On The Border ...... as radiation portal monitors have been screening vehicles for radioactive materials at the ports of entry in Nogales since Oct. 11. The 8-feet-tall machines do not create images like an X-ray machine, but detect energy emitted by radioactive sources coming from nuclear devices, dirty bombs, special nuclear materials, natural sources and isotopes used in medicine and industry. So far, the machines have only gone off for legitimate reasons, including detecting someone who has recently undergone radiation treatment. Customs & Border Protection is installing the machines at land border ports, seaports & airports nationwide.
***Cheaper Puerto Rico...... as the U.S. Territory has announced that Governor Anibal Acevedo Vila signed a bill into law to remove a 6.6% excise tax on Int'l imports into Puerto Rico, effective for goods entered on or after Oct. 17, 2006. The tax was based on the commercial value of the imported goods & collected by a local government tax agency.
***U.S. Trucking Up ...... as the American Trucking Assn. said its preliminary Sept. for-hire truck tonnage index rose 1.7%, following a revised 1.9% drop in Aug., its largest monthly increase since a 2% rise in April. The gain put the seasonally adjusted index at 133.1 or 1.7% below the same month last year. The not seasonally adjusted index fell 3.6% August to 112.5. "Even though truck tonnage improved in Sept., it's easy to see that the pattern of starts & stops, which began in April, continued last month," said ATA. "It's no surprise that tonnage was off from Sept. 2005," said ATA Chief Economist Bob Costello, "as the jump in hurricane-related freight last year is making year-over-year comparisons very difficult."
***Bridging The Gap ..... as the Federal Highway Administration said upgrading aging bridges in the U.S. could cost up to US$63Bn. An analysis conducted by The Road Information Program revealed about 26% of the nation's bridges are either in need of repair or not designed to support their current traffic loads. Bridges in the Northeast, where transportation infrastructure is often older & subject to harsh winters, are in the greatest need of repair.
***Pedal Off The Metal ....... as the largest U.S. motor carrier trade association has asked the federal government to restrict the speed of large trucks to 68 mph by requiring modified engines in new trucks. The American Trucking Assn. said the use of devices to set a speed cap on engines would improve highway safety & create a level playing field for all drivers by eliminating the ability of some to break the law. However, several states allow trucks to travel at speeds of 70 mph or more.
***Are Shippers Being Railroaded? ........ as deregulation of railroads has led to the sharp decline in rail carriers & severely limited options of some shippers. Parts of the country, like the Great Plains, are served by only one railroad and have no other options for shipping. The U.S. Surface Transportation Board is supposed to make sure railroads don't unfairly overcharge those areas where there is so little competition. It really doesn't offer much protection from exorbitant shipping rates. Complainants range from grain farmers and chemical companies to paper manufacturers and utilities. Although it is understandable that railroads need to charge higher prices to pick up freight in out-of-the- way locales, critics say railroads are essentially unconstrained in what they charge because the Surface Transportation Board is so weak.
***New Southern Road ....... as BNSF Railway Co. and CSX Corporation recently announced they have announced plans to create a high-volume intermodal rail corridor on lines that connect California, Atlanta and the southeast region of the U.S. The new service, which is expected to launch early next year, will be comprised of 2 daily intermodal trains between the west coast & the southeast in each direction, according to the carriers. Both BNSF and CSX maintain that corridor volume is expected to grow with the expansion of the west coast to the southeast intermodal market. When intermodal operations are underway on the new corridor, BNSF will extend capacity on rail lines connecting Avard, Okla., Memphis, Tenn., and Birmingham, Ala. And CSX will expand its rail line between Birmingham and Atlanta along with its intermodal terminal in Fairburn, Ga.
***Interpool, Inc. Rides The Rail ....... as it has reached a 10 year agreement with BNSF Railway Co. for Interpool to manage domestic chassis pools & supply future chassis at all BNSF terminals handling domestic shipping containers. Under this agreement, Interpool will supply 48' and 53' chassis that it owns or operates to BNSF customers, including the truckload motor carriers and intermodal marketing companies that use the BNSF terminals. Interpool expects to supply the BNSF pools with approximately 24,000 48' & 53' chassis by the end of 2006 and thereafter to supply domestic chassis as needed to satisfy BNSF domestic chassis pool requirements over the term of the agreement. Interpool is a leader of the industry.
***RailAmerica Downhill Run...... as the holding company for 42 short-line railroads operating on about 7,800 track miles in the U.S. & Canada, said its freight carloads were down 6.7% in Sep. to 100,385, from 107,570 in the same month 2005 -- primarily affected by lower shipments of coal, lumber & forest products, paper products & minerals. For the year to date, RailAmerica's total carloads are down 3%.
***New Pattern In Phoenix Int'l Fabric ...... as it has opened its Global Textile Logistics (GTL) division with focus on providing tailored services to the time sensitive commodity group of Textiles. "We are able to offer full services to satisfy every level of the textile supply chain from the shipment of raw material to factory, to final destination, to warehouses, and to pick & pack distribution to store shelves," said Phoenix. Phoenix International is the largest privately owned Int'l freight forwarder, NVOCC & customs broker headquartered in North America.
***Bass Bros. Take Arnold National? ....... as Oak Hill Capital Partners has signed a deal to acquire Harrisburg, Pa.-based Arnold Logistics, a warehousing and 3rd-party logistics company. Oak Hill said it views Arnold as a solid platform to become a national, full service 3PL provider. Founded in 1976, Arnold serves customers mainly in the consumer packaged goods, publishing and consumer electronics sectors. Arnold manages 24 leased warehouses located throughout the U.S. Oak Hill's lead investor is Robert M. Bass, one of the 4 brothers who founded Bass Brothers Enterprises in Fort Worth, Texas.
***SEKO To Brazil ...... as Illinois-based freight forwarder and logistics firm SEKO, has established an office in São Paulo, Brazil.
***Schenker's New Chosun Center ....... as it has started operations at its 10,000sq. mt. Korea Logistics Center, located in the Free Trade Zone of Incheon Int'l Airport. The facility offers 9,000sq. mt. of warehousing & handling space on 2 levels, with about 5,000 pallet locations.
***Schenker Rebrands Philippines ..... as it will in Jan. take over the operations of its partner in the Philippines for nearly 20 years, CPI Transport, as well as integrating the activities of BAX Global in the country. No financial details of the deal were disclosed.
***Target Logistics Goes To Capitaland ....... as it has acquired certain assets of Capitaland Express Inc., a freight forwarder that serves upstate New York. Albany-based Capitaland had more than US$10M of revenue in its fiscal year ended April 30. Terms of acquisition not disclosed.
***IJS Global Goes To Holland ...... as the Stamford, Conn. forwarder has acquired Transfairways BV, a Dutch logistics provider specializing in project forwarding. Transfairways will be integrated into the existing operations of IJS Global (Netherlands) BV, which will offer air, ocean, land transport & logistics services. Headquartered at Amsterdam Schiphol Airport, Transfairways was founded in 1991.
***NYK Logistics Bigger In Virginia ....... as it has broken ground on a custom-built logistics facility near Norfolk that will double its capacity in Virginia. The new cross-dock deconsolidation facility in Chesapeake has 186 dock doors and 130,000sq. ft. of space on a 35-acre site. The new building, expected to create about 100 jobs, is scheduled to open in May 2007.
***Deep End of The Pallet Pool ....... as German plastic pallet maker Paul Craemer GmbH will make a move into the North American cargo market by forming a partnership with Granville Composite Products Corp., based in Montreal. Newly formed Intelligent Global Pooling Systems is also developing a plastic pallet pool tracked by RFID tags.
***Forklift Mayhem ..... as a shopkeeper in Mahopac, NY got so angry about the way a man had parked his car that he climbed into a forklift, placed the fork under the car & lifted it off the ground, police said Oct. 25. Wasek Safrah, 51, of Ossining, also punched out both the offending car and the man who parked it. He was arrested on charges of criminal mischief & assault. Safrah felt the car, though legally parked, was blocking his access to a storage container or trash bin and got into a heated argument with the driver, who was an employee of another store and was no longer in the car. Safrah then punched the side of the vehicle, denting it -- then took the controls of a forklift & maneuvered lifted the car upward. After lifting the car, Safrah allegedly punched the driver in the mouth. Safrah was released pending an appearance in Carmel Town Court.
***Is Germanic Language More Direct? ...... as a German motorist followed the command "Turn right now!" from his auto navigation system & crashed into a portable toilet by the side of the road -- about 30 yards before the intersection he was meant to take. The overly obedient 53-year-old from Freiburg drove his sport utility vehicle off the road onto a building site, up a stairway & into the small portable toilet, police in the eastern town of Rudolstadt said Oct. 23. It caused US$2,500 worth of damage to the stairway.
***Australia Says Vegemite Or Fight ...... as U.S. customs agents are searching people from Australia & New Zealand for Vegemite, a popular yeast extract spread. This has has created consternation among antipodean expatriates living in America. The Australian Embassy in Washington said on Oct. 23 it was looking into Australian media reports that customs officials were checking people for the salty brown spread. The U.S. Food & Drug Administration has long prohibited imports of Vegemite because it contains folate, a B vitamin approved as an additive for just a few foods, including breakfast cereals. But until recently there was no difficulty bringing in a few jars for personal use. Nearly 100,000 Australians & New Zealanders live in the U.S. Like a similar British favorite called Marmite, it is usually spread on toast with butter or cheese. Reports from Australian & New Zealand media said some people had been searched or asked by U.S. Customs & Border Protection agents if they were carrying Vegemite. On Oct. 25 U.S. government dismissed media reports it had banned Vegemite. Vegemite is made in Australia by U.S.-based Kraft Foods Inc. What a world. Vegimite history.
2. The Cargo Letter Financial Page ______
**Arkansas Best Corp. (parent of LTL carrier ABF Freight System) DOWN with 3rd-quarter profit of US$31.5M or $1.24 a share, down from US$40.6M or $1.61.
**Continental Airlines. UP with net income of US$237M, compared with US61M in 2005 same quarter.
** Con-Way Inc. DOWN with 3rd quarter net income of US$63M, down from US$66M a year ago.
**CSX Corp. UP as it doubled Q3 net income to US$328M from US$164M a year ago.
**FedEx. UP as net income for 3rd quarter was up 40% year over year, to $475M. Only business segment showing a decline was FedEx Kinko.
**Forward Air. UP as Q3 net income from operations was US$19.8M, compared with US$18.7M in the prior-year quarter, an increase of 5.9%.
**GATX Corp. UP as net income from was US$42.6M or $.74 per diluted share compared to US$31.7M or $.57 per diluted share in same period 2005.
**J.B. Hunt Transport Services. UP with Q3 earnings of US$57.8M or 39 cents a share, up from US$39.8M or 25 cents a year ago.
**Matson Navigation. DOWN as 3rd quarter operating profit dropped 7% to US$34.2M, from US$36.8M last year.
**Norfolk Southern Corp. UP with best- ever 3rd quarter results as net income jumped 38 % to US$416M, from US$301M in year prior quarter.
**Old Dominion Freight Line, Inc. UP as net income for the 3rd quarter increased 26.2% to US$20,103,000 from $15,935,000.
**Pacer International. UP as 3rd-quarter net income rose 25.5% to US$18.3M or 48 cents a share, from US$14.6M or 38 cents a year ago.
**Ryder System UP as 3rd-quarter net income rose to US$65.3M or $1.06 cents a share, from US$63.3M or 98 cents a year earlier.
**Union Pacific Railroad . UP with net income of US$420M in the 3rd quarter, up 14% compared to US$369M a year ago.
**UPS. UP 5.2% to US$1.6Bn for quarter ended Sept. 30.
**Wilh. Wilhelmsen. DOWN with net operating profit of US$70M for 3rd quarter, "marginally weaker" than in the same period of last year.
**YRC Worldwide Inc. UP as 3rd quarter net income increased 12.3% to US$95.8M, compared to US$85.3M in same quarter last year.
***Taxes By The Ton ......... as U.S. Jones Act carrier Horizon Lines has increased its earnings guidance for the 3rd quarter and full year 2006 as a result of adopting the tonnage tax instead of the regular federal corporate income tax. The American Jobs Creation Act of 2004 instituted an elective tonnage tax regime whereby a corporation may elect to pay a tonnage tax based upon the net tonnage of U.S.-flag vessels of at least 10,000 deadweight tons operating in the U.S. foreign trade rather than the regular U.S. corporate income tax on the taxable income from such vessels. Horizon Lines has elected to apply the tonnage tax effective with the filing of its 2005 tax return during the third quarter of 2006, the full year 2006 and all future tax years. The carrier said that for the 3rd quarter and 9 months 2006 the decision resulted in a reduction in income tax expense of about US$39.4M and an increase in earnings per share from US$1.17 to between US$1.57 & US$1.59.
OUR "B" Section: FF World Air News***
3. Freight Forwarder World Air Briefs ____
***The New Air Is Chinese ..... as Boeing expects Chinese shipments to grow 10.8% per year over the next 20 years, and intra-Asian freight to grow 8.6% per year. As for other markets, Boeing expects that over the next 2 decades air cargo will grow 6.1% per year. Asia-North America traffic is projected at 7.1% and Europe-Asia at 6.9%. Growth will be slower in domestic North America, intra-Europe and Latin America markets. In order to meet continuing increased demand for air cargo capacity, the world freighter fleet will double from 1,789 aircraft at present to 3,563 by 2025. Nearly 62% of new freighter additions will be widebody aircraft, nearly 66% of which will have capacity of 40 tons or more. Some 75% of freighter fleet additions by 2025 will be modified passenger & combi aircraft. The remainder will be newly produced freighters.
***Top 10 Air Cargo AirLine Ranking ......... as Air Transport World Magazine names the cargo leaders, from FedEx with 4,577,425 FKT's, down to Cargolux with 5,291,887 FTK's.
2. Air France-KLM
4. Lufthansa Group
5. Singapore 2
6. Cathay Pacific
8. Korean Air
9. China Airlines
***New Boeing Giant Takes Flight ...... as on Sept. 9, 2006, the 747 Large Cargo Freighter (747-400 LCF) took off at Taiwan Taoyuan Int'l Airport. The flight test program will continue through the end of the year, The LCFs are a specially modified fleet of 3 planes with work being done by Evergreen Aviation Technologies Corp., a joint venture between General Electric & EVA Air. The jet has an enlarged upper fuselage which extends the upper deck rearward & can accommodate 300% more cargo by volume than a standard 747 aircraft. After completing initial test flights in Taiwan, the plane will be flown to Seattle's Boeing Field to complete its flight test program. The LCFs will be used to transport major composite structures of Boeing's all-new 787 Dreamliner. The 787 assemblies will be ferried between Nagoya, Japan, Grottaglie, Italy, Wichita, Kans., and Charleston, SC, before moving to the Boeing factory in Everett, Wash., for final assembly.
***Emirates Airline Pushes 747-8 Curve ...... as it has finalized an order for 10 Boeing 747-8 freighter aircraft at a list price of US$2.8Bn, with an option for 10 more planes. Boeing previously said the sale was from an unidentified customer. Boeing created the new stretch version of the 747-400 as its answer to the Airbus A380, now plagued by severe production delays. The 747-8 has space for 7 more pallets than the current version of the plane and has an improved wing design and engines for better fuel economy, according to Boeing. Five airlines, including launch customer Cargolux, have ordered 44 747-8 freighters since the plane went on sale in Nov. 2005. The future of the Airbus A380 remains a question. Airbus lost its 2nd chief executive in 3 months on Oct. 11 after his plans for resolving a crisis caused by delays to the A380 superjumbo offended Germany and opened a rift with parent EADS. The first A380 delivery is now delayed 1 year until Oct. 2007.
***Pilots & FedEx Finally Reach New Deal ..... as after 2 years negotiating, FedEx Express' pilots have ratified a new 4 year labor contract after voting in favor of the agreement presented in Sept., the Memphis, Tenn.-based company and the Air Line Pilots Assn. International said in a joint statement. The contract, effective Oct. 30, was approved by 94.6% of eligible pilots with a 93.7% turnout. The new contract provide pilots with an initial 9% pay raise and subsequent 3% increases at the end of the year for the next 3 years. The contract also includes a bonus of up to US$30,000, half of which is paid at signing & half of which will be paid June 1, 2007.
***DHL Boosts Asia Capacity With 49% of Polar ........ as there is a purchase agreement between DHL and Polar Air Cargo Worldwide, a wholly owned unit of Atlas Air Worldwide Holdings (AAWW). DHL Express will have guaranteed access to aircraft capacity for the 20-year life of the partnership. Additional available aircraft capacity will be available from another subsidiary of AAWW, Atlas Air, Inc. DHL will acquire a minority interest of 49% in Polar that will earn a 25% voting interest in the air carrier. The investment on DHL's part is US$150M with an initial cash payment of US$75M when the deal closes, with the remaining US$75M to be paid in two installments, on Jan. 15, 2008 & Nov. 17, 2008.
***DHL Hits The Fences ...... as it picked up the 2006 World Series trophy, officially called the Commissioner's Trophy, and the World Series MVP Trophy Presented by Chevrolet at Tiffany & Co.'s flagship store on 5th Avenue in New York City, and after an official escort to the DHL facility at John F. Kennedy Airport, they traveled to DHL's U.S. ground hub in Wilmington, IL, and then on to St. Louis &endash; all under tight security. A DHL delivery vehicle, escorted by the St. Louis Police Dept., delivered the trophies to Busch Stadium.
***Ryanair Will Be First To Annoy You In Flight ...... as it is expected to introduce cell-phone service on its planes next year. And U.S. airlines will probably follow suit, industry analysts say, though the airlines aren't saying much on the subject. Powering the change is new technology designed to keep cell-phone signals from interfering with a plane's guidance system & ground networks, experts say -- and airlines' desire to tap a new source of revenue. Most agreed it could debut in 2007, although U.S. airlines are being cautious, not wanting to offend passengers who might flee to other carriers to avoid listening to other passengers' conversations. It's already technically possible to make a call from an airliner under certain conditions using your own cell phone. But there are several hurdles: Airlines ban use of electronic devices below 10,000 feet; it's difficult to get a signal on a cell phone above 20,000 feet; and cellular coverage can be spotty or nonexistent over water or lightly populated areas. The new technology -- pico cells -- handles calls made by plane passengers from their mobile phones. The equipment, installed on each jetliner, picks up the signal from a cell phone, preventing it from interfering with the plane's guidance system while funneling it to the proper connecting point on the ground. European carriers are expected to charge US$2.50 to US$3 a minute, and some experts think a flat fee of US$10 per flight for phone calls, e-mail & wireless Web access might be workable in the U.S. If passengers will now be annoying us on cell phones ..... still another reason to keep weapons off flights!
***Rodent Fury ....... as it wasn't "Snakes on a Plane," but an Austrian Airlines jet made an unscheduled stop Sept. 30 after a passenger sneaked a hamster aboard and the rodent escaped. The flight from Palma de Mallorca, Spain to the southern Austrian city of Graz made a stop in Innsbruck so officials could search for the hamster and make sure it didn't gnaw through any wiring, the airline said. The flight was diverted after a passenger notified the crew that he had brought a hamster aboard and had lost track of it. Passengers were ordered off the plane, and some were taken by bus to Graz. By midafternoon, a search of the aircraft still had not turned up any sign of the hamster, authorities said. Austrian Airlines said the jet would remain grounded until the hamster was found "because it can't take off that way for safety reasons."
***What's In Your Comb? ....... as an airline baggage courier has pleaded guilty in Australia to stealing samples of women's hair from their lost bags & keeping them on file. Rodney Petersen, 30, had faced 110 charges of theft & stalking after taking strands of both head & pubic hair from the luggage of female passengers whose lost suitcases he had been charged with returning. A search of his home and van revealed more than 87 plastic bags containing human hair, 80 of them labelled with the name of its owner, as well as several exercise books containing the details of more than 365 women, some of whom were personalities known to the public. The books contained the names & personal details of women, while police also found a small telescope in Peterson's van. Petersen collected the samples by rifling through suitcases before delivering the lost bags to their owners, but it was unclear whether he took the samples from items such as hairbrushes or from "other sources." The errant courier was arrested when police stumbled on him looking through luggage at the back of his van as he was delivering bags to a woman at a hotel in the Melbourne area, the court heard earlier. The courier, who worked as a sub-contractor for a firm employed by the Australian airline Qantas, pleaded guilty in Melbourne Magistrates Court to 7 counts of theft and reserved his plea to 7counts of stalking. There was no plea to 7 more counts of just plain grossing everyone out. Geeez!
OUR "C" Section: FF World Ocean News***
4. FF World Ocean Briefs
***New Port Security Law Is SAFE ...... as the Security & Accountability for Every Port Act (SAFE), which Congress passed Sept. 29 & signed by President Bush Oct. 16, solidifies into law most of the Homeland Security Dept.'s existing security programs, such as the Customs-Trade Partnership Against Terrorism and the Container Security Initiative. The legislation also calls for 22 of the largest U.S. ports to scan all incoming cargo for radioactive materials by the end of September 2007, encourages development of the "Green Lane" for approved shippers, and raises the funding level for port security grants. The SAFE legislation authorizes the spending of more than US$3.4Bn on port security over the next 5 years.
***Others Say New Law Not So SAFE ....... as an executive with Dubai Ports World, the Arab-owned firm whose purchase of American port facilities caused an uproar this year, said the new U.S. port security law SAFE (Security & Accountability for Every Port Act) was fundamentally inadequate. "There's a fundamental shortcoming in the SAFE Port Act," said David Sanborn, Dubai Ports World's managing director of the Americas. "It's not ambitious enough." Dubai Ports, owned by the United Arab Emirates, became the center of a bitter debate in the U.S. Congress after buying assets at 6 U.S. ports within its US$6.8Bn purchase of Britain's Peninsular & Oriental Steam Navigation Co. in Feb 2006. Sanborn criticized the act for setting up only a single pilot program to test at three foreign ports the feasibility of scanning cargo headed for the United States while it is still overseas. Sour grapes for Dubai Ports World ...... or are they right?
Radiation Portal Monitor Analysis -- New U.S. Government Accountability Office report paints a damning picture .....
***Rouge Container - Greatest Threat ..... as a new RAND Corp. report concludes it is not adequate to base maritime counterterrorism efforts only on increasing port security and the security of cargo containerships, rail cars & trucks that transport goods into and out of U.S. ports. Researchers point out that their review of more than 30 years of terrorist activity shows that less than 2% of international terrorist attacks have hit maritime targets. Historically, this is because it has been difficult to successfully carry out maritime terrorist attacks and because such attacks have rarely caused the large loss of life or generated the heavy news coverage that terrorists seek, the study says. The largest maritime disaster would involve the detonation of a nuclear device smuggled through a major domestic port inside a shipping container. However, the report stresses that the likelihood of such an event occurring is far lower than for other types of attacks. The report acknowledges that the relative prioritization of risks in the maritime domain remains underdeveloped. Read the report.
***Three More Ports Launch CSI Inspections ........ as cargo screening for terrorist weapon smuggling under the U.S. Container Security Initiative has begun at the ports of Caucedo in the Dominican Republic, Freeport, Bahamas, and Barcelona & Valencia, Spain, U.S. Customs & Border Protection said this month.
***Singapore #1 In Race ..... as with 9 months completed, it is ahead of Hong Kong in the race for world's busiest port. Singapore handled 2.13 million TEUs in Sept., compared to 2.17 million TEUs at Hong Kong. For the year to date Hong Kong's container throughput is up 5.9% at 17.7 million TEUs while Singapore has witnessed 5.7% growth to 18.3 million TEUs. In 2005, the port of Singapore handled 23.2 million TEUs, making it the most productive port in the world, while Hong Kong came in 2nd with 22.4 million TEUs.
***Gentlemen -- Start Your Diggers! ...... as nearly 80% of voters in Panama said expanding the Panama Canal is the right thing to do in a national referendum which was held on Oct. 22. Last April, the Panama Canal Authority's (ACP) board of directors recommended building a new lane and a 3rd set of locks along the Canal that would double its capacity and allow for more traffic. This lane expansion is expected to cost US$5.25Bn projected to meet rising demand for the Canal's routes and services, with an emphasis on the increase in trade activity coming out of the Canal from Asia heading for the U.S. and back, says the ACP. This is also known as the "All Water Route." The expenses for the Canal expansion will be absorbed by Panama Canal customers, including shippers and ocean carriers, among others, through a graduated toll increase system. The canal authority estimates construction of the locks will take 7 or 8 years and may begin receiving ship traffic as early as 2014. After 92-years of serving world commerce, the Panama Canal will now have a major expansion.
***Nicaraguans -- Start Your Diggers! ...... as fueled by a boom in Asian exports and the fact that the Panama Canal my soon reach its capacity, Nicaragua has officially announced its US$20Bn plan to build a canal linking the Atlantic & the Pacific Oceans. In order to accommodate vessels too large to use the Panama Canal, the canal will have a deeper draft than the Panama Canal and will make use of 60-mile-wide Lake Nicaragua. If approved by Nicaragua's Congress, the project would be a joint public-private venture financed by unnamed investors. More.
***Goodbye Hanjin Shipping? ...... as it is the center of takeover speculation after Israeli tycoon Sami Ofer, who has a controlling interest in Zim Integrated Shipping Services Ltd. through the Israel Corp., raised his stake in the Korean company. Various media reports suggest that Citigroup, on behalf of Ofer, purchased an 8.7% stake in Hanjin for US$161M, from Norwegian shipping magnate John Fredriksen's Geveran Trading Co. The deal represents Geveran's entire interest in Hanjin.
***Indian Ships Low In The Water ...... as the national shipping industry will need at least US$4Bn in the near future to replace 414 of the country's 739 ships as they will complete their average life, the Mumbai Mirror reported. The report said that about 40% of Indian ships have are 20 years or older and can't be stretched for more than 25 years of service, according to the Indian National Ship-owners' Assn. About 56% of Indian fleets need to be phased out soon under IMO guidelines.
***Sino - Japanease Price Fixing ...... as China's Ministry of Communications is investigating price fixing designed to keep rates in the China/Japan container trade artificially low, according to a report by Bloomberg. Japan is China's 3rd biggest trading partner in the first 7 months of the year. Starting Oct. 15, all mainland shipping lines operating between the two Far East powers have had to report their rates to the Ministry with any carriers offering zero freight rates or cash rebates facing the loss of licenses or reduced frequencies. "There has been irregular price competition between container carriers on China/Japan routes for a while," said the ministry's Web site. The country's two largest carriers, COSCO Container Lines & China Shipping Container Lines, are still majority-owned by the Chinese government after recent initial public offerings.
***Since 1837 - Goodbye Peninsular & Oriental Steam Navigation Co. ...... as Dubai Ports World has decided to drop the P&O Ports (Peninsular & Oriental Steam Navigation Co.) brand from March next year. Instead, P&O Ports' global terminals will get a local identity such as DP World Vancouver or DP World Nhava Sheva. The DP World corporate brand as well as P&O Ferries, P&O Ferrymasters, P&O Maritime Services and P&O Estates will all be left unchanged. The Dubai state-owned company bought the global operations of London-based Peninsular and Oriental Steam Navigation Co. for US$6.8Bn in March. Following the high-profile political outcry, DP World is being forced to sell P&O Ports' operations in the U.S., with reports suggesting offers being made over the US$700M valuation. What's a name worth after 169 years?
***Hasta La Vista Container Fee ...... as California Governor Arnold Schwarzenegger rejected Senate Bill 927, which would have levied a US$30 fee per 20' equivalent unit (TEU) on cargo containers moved through the ports of Los Angeles & Long Beach. Returning the bill to the California Senate unsigned, Schwarzenegger said in part, "This measure is flawed in its construction, application, lack of accountability & failure to coordinate with other public & private financing sources ignoring opportunities to leverage additional funding." Schwarzenegger added, "This measure is drafted to include only 2 ports and applies only to goods shipped in containers, ignoring all other forms of shipping & ports of entry." Schwarzenegger also pointed out the fees would hit U.S. exporters and have the possible unintended consequence of impacting the sale & delivery of goods grown & manufactured in California.
***Real Sea Monsters ..... as "K" Line has taken delivery of the largest containership ever built in Japan, M/V Humber Bridge, which has a capacity of 9,040 TEUs, although the Tokyo-based carrier has declared it with a loadable capacity of 8,212 TEUs. The vessel was built by IHI Marine United Inc. and is the 1st in a series of 8 ordered by "K" Line for use in the Asia/North Europe trade -- all with an overall length of 336mt.(1,102ft), a width of 45.8mt. (150.3ft.) and a service speed of 25.6 knots. Not to be out done, China Shipping Container Lines received the 3rd in a series of eight 9,572-TEU ships from Korean shipyard Samsung Heavy Industries on Oct. 11. M/V Xin Shanghai is 336.7 meters long & will be deployed in the Asia/Europe trade.
***Sea Containers Sinks ...... as the Bermuda-registered company has filed for Chapter 11 bankruptcy protection in the U.S. after failure to pay a US$115M bond due Oct. 15. The filing only relates to Sea Containers and 2 subsidiaries, Sea Containers Services Ltd. & Sea Containers Caribbean Inc. As of Oct. 14, Sea Containers had US$650M of consolidated debt outstanding with US$126M total cash either restricted as security for obligations to 3rd parties or held in subsidiaries unable to be transferred back. The New York Stock Exchange suspended the trading of Sea Container's common shares & senior notes.
***Wireless Beer ...... as Heineken is collaborating on the "Beer Living Lab" project with IBM, ocean carrier Safmarine, the University of Amsterdam and customs in the U.S., the UK & the Netherlands. The new project will track cargo container shipments of Heineken beer from Europe to the U.S. using satellite & cellular technology. IBM said the goal is to test technology that will provide real-time visibility & interoperability through an advanced wireless sensor platform. Safmarine will ship 10 containers of Heineken beer from locations in both Netherlands & the UK, through their customs authorities, to the Heineken U.S. distribution center -- each monitored by am onboard wireless sensor platform. The goal is to create paperless documentation through better system interoperability, resulting in faster deliveries & reduced costs for Int'l trade.
***Hanjin Brands Down Under ...... as South Korea's carrier is establishing a wholly owned subsidiary in Australia to "strengthen the organization and sales competency & improve overall profitability." Hanjin Shipping (Australia) PTY Ltd. will start full operations in Jan. 2007 with a branch office in Sydney -- sales offices in Melbourne & Brisbane.
***Virginia Port Authority Will Try CommerceGuard....... as it is employing Radio Frequency IDentification (RFID) chips for port security. The chips were bought from from Savi Networks & General Electric Security to protect incoming container traffic. An RFID chip is an automatic identification marker that can be attached to or incorporated into an object for the purpose of identification using radio waves. The RFID tracking system in General Electric Security's CommerceGuard Container Security Device is able to transmit its data to CommerceGuard RFID readers within a 100-foot range. The CommerceGuard system also contains sensors that can detect whether or not cargo-container doors have been opened after sealing. See the system:
***Trans-Rak Could Be Breakthrough Process ...... as Maersk Logistics is now shipping Lotus automobiles from England to the U.S. in containers using a racking system called Trans-Rak. Maersk is carrying the cars on its regular Felixstowe/Charleston transatlantic service. Lotus Elise cars are loaded in the U.K. manufacturing plant in Norwich then taken by ship to Charleston and trucked to International Auto Processing in Brunswick, Ga. Using 2 Trans-Rak frames fixed inside the container, 5 Lotus vehicles fit into a single 40-foot high-cube box. Trans-Rak said Maersk Logistics has invested in a fleet of 200 Trans-Rak units in the past year.
***Half A Million Reasons Not To Spill ...... as the State of Washington said ConocoPhillips will pay US$540,000 in fines for a 2004 oil spill in Puget Sound. The state's Dept. of Ecology, said M/T Polar Texas, owned by the Polar Tankers subsidiary of ConocoPhillips, spilled more than 1,000 gallons of crude oil into Puget Sound's Dalco Passage on Oct. 13, 2004.
***The Effects of Deadly Collision ...... as the 2nd officer of the Zim operated container 3,834-TEU M/V Zim Asia that collided with a Japanese fishing boat at the end of last year, killing 7 people, has been sentenced by a Magistrate's Court in Haifa to 12 months community service following a plea bargain. Croatian national Pilastro Zdravko was in charge of the Israeli carrier when it crashed into the small fishing vessel Sept. 25., 2005, 25 miles off the N. coast of Japan.
***The Effects of Drinking Salt Water ...... as NCL Corp. has announced that Rosie O'Donnell will serve as the godmother of its newest ship M/V Norwegian Pearl. The talk show host & actress will christen NCL's newest Freestyle Cruising vessel in a ceremony at the Port of Miami on Dec. 16 at 5 p.m.
COSCO Container Lines moved 1.38 million TEUs in the 3rd quarter, up 16.4% over the same period last year
Matson Navigation's quarterly container volumes for Hawaii were down 2% to 44,600 units. Hawaii automobile volumes decreased 15% to 27,100 units, while container volume declined 14% to 3,7900 units & volume for the carrier's new China service reached 10,200 units.
***24 Tickets Pulled ...... as the U.S. Federal Maritime Commission has revoked 24 OTI licenses for failure to maintain valid bonds. The firms are AA Pacific, Fort Lee, N.J.; ASAV Uluslararasi Nakliyat Ve Ticaret Ltd. Sirketi, Istanbul, Turkey; Billings Freight Systems, Atlanta; Bluefreight Worldwide Logistics, Pomona, Calif.; Convenant Int'l Corp., Miami; Dietrich-Exccel, Miami; Elite Shipping, Miami; GSG Investment, Redondo Beach, Calif.; Global Cargo Corp., Miami; Int'l Import Export Service, Jamaica, N.Y.; Jet Dispatch (H.K.) Ltd., Hong Kong; Krennerich Int'l, Houston; Onebin.Com, Fort Lauderdale, Fla.; Pantrac Transport Corp., Brooklyn, N.Y.; Sea, Air & Truck Forwarding, Houston; Sparrow Freight America, Carson, Calif.; South American Lines, Miami; Starlift Logistics, Irvington, N.J.; Transcom Express, Red Bank, N.J.; Trident Universal, Lutz, Fla.; Val-Mar Int'l, Cooper City, Fla.; Valu Freight Consolidators, Miami, Braverman Enterprises of Los Angeles and Eastern Freight Forwarders in Riviera Beach, Fla.
***This Month In U.S. Navy History .......
1775 - Congress authorizes 4 vessels for the defense of the United Colonies.
1799 - William Balch becomes the Navy's 1st commissioned chaplain.
1824 - U.S. schooner Porpoise captures four pirate ships off Cuba.
1843 - Capt. Robert Stockton on Princeton, the 1st screw-propelled naval steamer, challenges British merchant ship Great Western to a race off New York, which Princeton won.
1864 - Lt. William Cushing sinks Confederate ram Albemarle with a spar torpedo attached to the bow of his launch.
1942 - USS Hornet (CV 8) was lost and USS Enterprise (CV 6) was badly damaged during the Battle of the Santa Cruz Island.
1962 - Atlantic Fleet begins quarantine operations to force Soviet Union to agree to remove ballistic missiles and long range bombers from Cuba.
1983 - Terrorist bombing of Marine barracks at Beirut airport in Lebanon kills 241 members of the 24th Marine Amphibious Unit.
1990 - Two Sailors are killed when a steam line ruptures in the boiler room of USS Iwo Jima (LPH 2) in the Persian Gulf.
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 photo feature for Oct. 2006: "Where The Trade Winds Blew"
See our other new photo feature for Oct. 2006: "Maersk's Montevideo Melee!"
See our newest photo feature "Singles Only" - Transportation Disasters Told In A Single Photo! Includes our photo coverage of currently stricken M/V Cougar Ace!
Our new features were not quite ready to post for this edition, but get ready for:
"Full Speed Ahead"
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..............
Are My Goods Subject to Quota? ......... from U.S. Customs & Border Prtotection
Council of Supply Chain Management Professionals
European Commission Directorate of Competition Paper On Ocean Carrier Antitrust
Field Guide To Understanding Forklifts
GAO: Radiation Portal Monitor Analysis Inadequate ........... A new Government Accountability Office report paints a damning picture of the federal government's decision-making process in developing and deploying radiation detection portals at U.S. seaports.
Piracy Attacks Map 2006
Proposed Modifications to the Harmonized Tariff Schedule of the United States ....... classifications for customs.
Proposed Rule Revisions -- Export & Reexport Controls for the People's Republic of China (PRC); New Authorization Validated End-User
Protect Yourself From Hacking ........ an ethical presentation
RFID: Authenticity vs. Pedigree
Reducing Warehouse Labor Costs
Seafarers Guide to Port State Control Inspections in the U.S. ......... from Int'l ship owners' organization BIMCO. High & low-resolution versions:
Three Habits of Leading Supply Chains
Torres Strait & Great North-East Channel Between Australia & Papua New Guinea -- New Pilotage Requirements ........ US$205,000 fine for failure to comply.
U.S. Customs' Antidumping & Countervailing Duty Online Search System
U.S. Import Quotas ......... free book explains the types of product & merchandise quotas that are administered by Customs & other agencies.
U.S. International Trade Administration's Trade Information Center ...... U.S. government export assistance programs, Int'l tradel & tariff information -- guides for exporters.
U.S. Dept. of Commerce's Int'l Trade Commission
U.S. Dept. of Defense Uniquie ItemRFID Program - From Cradle To Grave
Air Cargo Benchmarking & Profiler
Logistics Guides & Supply Chain Market Reasearch
UK Ships' Supplies Register
World Trade Organization Events
2006 Trade Symposium - U.S. Customs & Border Protection -- "The World of Trade - Five Years After 9/11." .......... Dec. 13-15, 2006, Washington, D.C.
2nd China Int'l Container & Intermodal Transportation Development Forum ......15-16 Nov 2006, Beijing , PR China
Air Cargo India 2006 ........ Nov. 16-18, 2006, World Trade Center, Mumbai
CLECAT Freight Forwarders' Conference........... 30 Nov. 2006 , Brussels Marriott Hotel, Belgium
Fundamentals of Supply Chain Management ......... Nov.13 - 14, 2006, Philadelphia, PA USA
Intermodal Exhibition & Conference 2006 ........... 5-7 Dec. 2006, Hamburg Messe, Hamburg, Germany
Int'l Logistics & Transportation Conference & Exhibition Israel ........ Feb. 13-14th, 2007, Airport City, Lod
Managing Offshore Relationships in China & Beyond ......... March 5 - 6, 2007, Los Angeles, CA
Meeting The China Challenge ........ Online conference to help supply chain managers take advantage of opportunities & avoid pitfalls of doing business in China.
Middle East Combating Financial Fraud Practices Summitt ........ 1 Nov. 2006, Dubai, UAE
Practical Dry Cargo Chartering ....... 27-30 Nov. 2006, The Baltic Exchange, London
Supply Chain Directions Summit ........ 28-29 Nov. 2006, San Francisco
RFID Implementation: How to Evaluate, Justify &Deploy Your RFID Solution ....... 13-15 Nov. 2006, Las Vegas
Road Haulage Assn. Annual Security Seminar & Security Exhibition ....... 7 Nov. 2006, at Towcester Race Course, Northamptonshire, UK
Free Webcasts - Now>>>>>>>>>
"It's All About Visibility".......... complex supply chains by improved visibility of activities and inventory at the plant and warehouse floor level.
Supply Chains For The Information Age: Mastering Uncertainty & Change
Deep Blue Marine ......... watch the treasure search movie here, Online.
Depth Charge Detonation - Amazing!
Leisure Boating Club .... don't buy it.
Schat & Harding Marine Evacuations Systems
S/V Pelican of London ........ needs your help.
Reuters - The State of The World
the earthrace ......... coming to a town near you.
Time Lapse -- Each Day At LAX
Visit New York
Western Connection ....... since 1933, add your business logo for free.
Wounded Warrior Program
OUR "E" Section: The Forwarder/Broker World***
7. New Transport Related Legal Cases _______
Asoma Corporation v. SK Shipping Co., Ltd.
U.S Court of Appeals for the 2nd Circuit
Oct. 24, 2006, No. 05-5308-cv
Opposing Forum Selection Clauses > Court ruled that, where the charterer is also the consignee of the cargo, the forum selection clause in the charter party prevails over the forum selection clause in the bill of lading. This ruling only follows normal contract interpretation.
Dresdner Bank AG v. M/V Olympia Voyager
U.S. Court of Appeals for the 11th Circuit
Sept. 27, 2006, No. 05-12220
Insurer Entitled To Lien For Value of Insurance Provided > Court ruled that an insurer that provides marine insurance for a vessel is entitled to a maritime lien for the value of the insurance provided. In the instant case, claimant provided marine insurance for a cruise ship. Arrangements were that the premium was to be billed in six installments spread over several years. The ship owner went bankrupt and claimant filed its claim in the subsequent admiralty proceeding. The district court ruled that the insurer was only entitled to a lien in the amount of the premiums for which it had sent invoices prior to the bankruptcy. The appellate court reversed, holding that the maritime lien arises automatically upon the furnishing of the necessary, without regard to when an invoice may have been issued. On a related issue, the court held that the insurer is not entitled to a maritime lien for having insured the vessel while it was under arrest, because the insurer did not obtain prior approval from the court for providing such insurance. The Opinion.
Hellenic Investment Fund, Inc. v. Det Norske Veritas
U.S. Court of Appeals for the 5th Circuit
Sept. 18 2006, No. 05-20862
Forum Selection Clause> Court ruled that a party purchasing a ship & relying on the survey performed by the existing owner's classification society is bound by the forum selection clause contained in the agreement between the existing owner and the classification society. In the instant case, plaintiff agreed to purchase a ship under the condition that, at the time of purchase, it be in class, free of recommendations and average damages affecting class. Having been made aware of the pending sale and after completing the necessary inspections, defendant classification society issued a confirmation of class certificate. The sale was consummated the day the confirmation was received. Shortly thereafter, it became apparent that the ship had various serious deficiencies. Plaintiff brought suit against defendant classification society in Texas. Defendant asserted that the forum selection clause in the agreement between it and the previous owner, which provided for resolution of disputes in Norway, should be enforced against the new owner. The court concurred, ruling that the new owner was attempting to enforce the classification contract, while repudiating the contract's forum selection clause. Under the doctrine of direct-benefit estoppel, the new owner is bound by all of the provisions of the previous contract. 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
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