Law Offices of Countryman & McDaniel


Air & Ocean Logistics - Customs Broker News

31 July 2007


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's what happened in our industry during July 2007!

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 _____________ 

***Our Cargo Law Website ..... as we are very proud that you readers have boosted our visitor traffic to 13,076,624 Internet hits this month -- a figure we never imagined would ever be reached -- 59,879,200 hits for the year thus far. In large part this success comes from your following our Daily Casualty Reports, our many photo features over the decade & lessons learned from the events we cover. Today marks the 7th month of coverage for the year's most riveting story -- M/V MSC Napoli. We have followed -- day by day -- the valiant struggle & sad death of this new vessel and her many misadventures since Jan. 2007. Triumph, tragedy & The Cargo Law Air Force. Good-bye M/V MSC Napoli, but we have much more to post for this feature.

***Tainted Cat Food, Exploding Laptop Batteries & Antifreeze Toothpaste ..... as President Bush issued an Executive Order on July 18 establishing an Interagency Working Group on Import Safety focused on investigating ways to minimize dangers from food & other consumer products imported into the U.S. The President's order instructed the working group to "identify actions that could be taken within existing resources to import safety, including review of cooperation with foreign governments and manufacturers regarding their inspection and certification procedures."

***Mexico Wakes Up ..... as the government plans to spend US$44.5Bn to upgrade & expand the country's transportation infrastructure under President Felipe Calderón's US$250Bn national development plan for 2007-2012. If approved by the Mexican Congress, the plan would spend US$27Bn on highway development, US$5Bn on the national rail system, US$7Bn to expand ports in the country, & US$5.5Bn on the nation's airports. The government would provide US$22Bn of the total, with the private sector picking up the remaining US$22.5Bn. The highway component of the plan calls for building & modernizing 11,000 miles of highways. Of this total 3,400 miles would be trunk routes, Another goal is to add 880 miles of railway to the national rail system. Included in this would be the development of the proposed Punta Colonet port complex in Baja California. The Mexican government envisions the Punta Colonet port complex as being a major competitor to U.S. West Coast ports such as those in Southern California.

***Mexico Blocked Again ..... as the U.S. Congress voted July 24 to block the Bush administration's planned Mexican trucks program, limiting visiting trucks to the current border-area zone. The controversial program, announced by the Transportation Dept. earlier this year, would allow 100 Mexican trucking companies to move cargo into the U.S. beyond a 25-mile border zone now allowed. The Mexican government set regulations for U.S. trucks traveling into that country &emdash; a provision demanded by U.S. lawmakers in response to the program &emdash; but 114 members of Congress wrote to President Bush earlier this month urging him to suspend the program. A spokeswoman for the Federal Motor Carrier Safety Administration told Bloomberg there was no set start date planned for the program, which had been scheduled to begin in April.

***Let's Give Them Ample Notice ..... as the Hong Kong Trade & Industry Dept. notified exporters on July 25 that U.S. Customs & Border Protection "jump teams" will visit textile factories in Aug. to verify the country of origin of apparel products. CBP trade specialists from Aug. 10 to 24 will survey production facilities in the city and Hong Kong's system of controls for ensuring articles of clothing are genuinely manufactured in the city, according to a memo posted on the agency's Web site. U.S. Customs usually conducts overseas visits to textile production regions such as Hong Kong on an annual or biannual basis. Special agents & import specialists check whether factories have the capability to produce the type of textile and amount they claim to produce.

***C-TPAT Overseas Qualification ..... as U.S. Customs & Border Protection has selected the 10 private sector companies that are eligible to provide 3rd-party security audits in China for companies participating in the Customs-Trade Partnership Against Terrorism. CBP has said it would only run the 3rd-party validation program in China because that is the sole country the agency's own security specialists cannot gain access to vet the C-TPAT company's supply chain and extend trade facilitation benefits. CBP has stated that use of private contractors is strictly voluntary and that importers will have to pay for the service. Survey results will be forwarded to CBP for review and final determination of a company's C-TPAT status. The 10 private sector inspection services approved for the pilot by CBP are:

* ABS Group.

* Cotecna.

* CSC C/STR -- Cal Safety Compliance Corp.

* Det Norske Veritas.

* Intertek.

* Omega Compliance.

* Pinkerton.

* Sharp Global.

* SGS North America.

* TUV Rheinland.

The Countryman & McDaniel law firm brings C-TPAT qualification to U.S. companies.

***Crackdown Or Ploy? ..... as piracy crackdowns in China continue apace as Beijing seeks to dispel the notion of China as a hotbed for fake goods. The state-run news agency Xinhua had a recent bevy of stories related to trademark infringement of apparel items. In one case, a Beijing court ordered Guangzhou Taie Dress Co. Ltd., Beijing-based Nianniangao Garments Co. Ltd. and the Beijing Urban-Rural Trade Center Co. Ltd. to pay French brand Lacoste nearly US$100,000 for producing & selling clothes with a logo almost exactly identical to Lacoste's famous crocodile. Another famous logo, Nike's Air Jordan silhouette, is the subject of a lawsuit filed by the Oregon-based shoemaking giant, which alleged in a Chinese court that 3 shoemakers in Fujan province were producing shoes with the Jordan logo and selling them in the Shanghai outlet of French retailer Auchan, which was also named in the suit. Nike is seeking roughly US$130,000 in compensation. The shoes were being sold in Auchan's Shanghai & Ningbo stores for about US$12. In the U.S., Air Jordan typically retail for more than US$100. In a signal of how widespread and accepted piracy is, the companies being sued have argued that the Jordan logo is "not well-known in China though it might be in other countries, and therefore, no apology is necessary, according to the Xinhua report. One last item on counterfeiting hits a little closer to home, with Beijing officials worried about fake Olympic-branded goods on the rise. "China's market supervisors detected 428 violations of the Beijing Olympics logos last year, up 45% from 2005, according to the State Administration of Industry and Commerce," the Xinhua report said. In all, the newspaper said that from 2004 to 2006 the SAIC has dealt with 1,128 infringement cases involving US$1.95M imposed in fines. Eyewash?

***October 2007 U.S. Customs Broker License Exam ..... as Customs stated that the exam will be held on Mon., Oct. 1, 2007 at various locations throughout the U.S.. Applications to take the exam are due on or before Fri. Aug. 31, 2007. The Customs Broker Examination will last 4 hours & consist of 80 multiple-choice questions, Customs stated. A computed score of 75% is required to pass.

***Panalpina Amidst Bribery Scandal ...... as its share price tumbled as much as 9% earlier this month following an announcement from the Swiss logistics firm that it is involved in a bribery probe in the U.S. The Basel-based company has launched an internal investigation following a request by a U.S. District Court that its U.S. unit produce documents related to its services to Nigeria for a specific customer and its contractor. "This request was triggered by the plea agreement of such customer with the U.S. authorities for allegedly making improper payments to Nigerian officials to secure preferential customs treatment," Panalpina said in a statement. The U.S. authorities have since extended the scope of their review to Panalpina's documents related to services into Nigeria, Kazakhstan & Saudi Arabia for a limited number of customers. "As the proceeding is at an early stage, no conclusions can be drawn at this time as to what remedies U.S. authorities may seek," Panalpina said.

***UPS Express Critical ..... as the company launches a service that meshes all of UPS's same-day & urgent capabilities into a single suite, allowing customers to more effectively manage package and heavy freight shipments together. For the 1st time in the industry, customers have a single point of contact regardless of whether they're shipping a small package or a 1,000 pound machine part &endash; air or ground, domestic or international. Customers now have a single call center, one bill and one Website to manifest and track their truly urgent shipments. A single "touch point" for all urgent shipping is a convenience UPS has worked to provide by meshing the capabilities of UPS SonicAir, the UPS Airlines & UPS Freight. UPS has access to virtually any type of aircraft or vehicle around the world &endash; both those in its own fleets and those of vendors -- meaning customers have a variety of time options, specialized equipment, communication systems, advanced tracking and worldwide reach to meet their needs. UPS Express Critical likewise makes billing simple, allowing package shippers to bill their freight shipments on their package account & vice versa.

***Damco Grows ....... as A.P. Moller-Maersk has merged 2 of its forwarding operations & will jointly market them under the under the Damco name. The company has combined Damco Sea & Air, the former forwarding arm of P&O Nedlloyd Ltd., with DSL Star Express, part of the Maersk Logistics group since 2001, under the common Damco banner. Maersk said Damco traditionally has been strong in the Asia-to-Europe and transatlantic trades. In contrast, DSL has focused primarily on the transpacific eastbound trade. In North America, the new organization will be called Damco USA. The global organizationis headquartered in Copenhagen, Denmark. Damco will have 300 offices in 55 countries, and will offer freight forwarding, customs clearance, documentation and trucking for both air & ocean shipments.

***Agility In New Zealand .... as the Dubai-based logistics services provider has completed the acquisition of New Zealand freight forwarder LEP International Ltd. The new company incorporates LEP International Ltd. in New Zealand and LEP Int'l Pty. Ltd. in Australia and a related project logistics company, Pan Orient Shipping Services Pty Ltd., which trades under the name of AFS Projects and Logistics. Agility's LEP International has offices in Auckland, Wellington, Christchurch & Dunedin. The Australian network across the region incorporates its headquarters in Melbourne and branch offices in Sydney, Brisbane, Adelaide & Perth.

***Desert Venture ..... as real estate investment trust AMB Corp. last week announced plans to break ground next year on 1.5 million square feet of industrial space in the Mojave Desert city of Adelanto. At final build-out, the firm's Adelanto Gateway Logistics Center will feature 7 million square feet of warehousing & distribution space. Located about 80 miles northeast of downtown Los Angeles near the developing Southern California Logistics Airport, the center is being built on a 400-acre parcel that AMB acquired in May. Adelanto was the subject of significant land speculation on rumors that gambling would be allowed -- it wasn't.

***Navigators Finds Its Way Up ..... as "NAVG" was added to the NASDAQ Financial-100 Index on July 26. The NASDAQ Financial-100 Index includes 100 of the largest domestic & int'l financial companies listed on The NASDAQ Stock Market based on market capitalization. As of June 30, 2007, Navigators' market capitalization was US$907M. "We are delighted to be part of the NASDAQ Financial-100 Index," said Navigators' CEO Stan Galanski. "It is a very important milestone for the Company, reflecting the hard work and dedication of our employees." Navigators is a leading provider of transportation related insurance products.

***UPS Clears The Teamsters Air ...... as it said some of the Teamsters' union's locals are using a "campaign of deception" in an attempt to organize the company's freight-hauling unit, Bloomberg reported. Some locals have been telling employees there will be a master agreement with the teamsters, followed by one with UPS Freight, a company official told Bloomberg, adding that it was not true. The Teamsters are seeking to extend their contract from one UPS Freight facility in Indianapolis, where 125 workers have accepted representation, to the 15,000-employee unit's other 200 sites, Bloomberg reported. UPS Freight is the former Overnite Corp., acquired by UPS in 2005.

***Teamster Death Case Upheld .... as a federal judge has upheld a Los Angeles Superior Court decision awarding a US$55.2M judgment to the family of a man run over by a Dodge truck at a Port of Los Angeles container terminal in 2004. In March, jurors in Los Angeles found that a defect in the Dodge Dakota pickup, owned by the terminal operator, caused the death of Richard Mraz. The 38-year-old longshoreman was working at the port's American President's Line terminal when the truck began to reverse after he exited the vehicle. Mraz attempted to stop the vehicle, was knocked to the ground by the impact & suffered a fatal head injury. APL settled with the family before the trial began. DaimlerChrysler appealed the decision in April but the case's original Superior Court judge, Mel Red Recana, denied the firm's request for a new hearing. The alleged defect occurs when the transmission is placed in what appears to be the park position, then allegedly slips into powered reverse after a short delay. DaimlerChrysler plans to appeal the decision to the California Court of Appeals. We agree with the decision, not the amount.

***Mom & Pop Out of The Warehouse Biz ..... as according to Int'l property consultants King Sturge's latest research the average size of big warehouses (over 100,000 sq ft) is getting bigger. In 2005 the average size was 274,519.88 sq. ft. and at the end of 2006 it stood at its highest level in 10 years at 351,045 sq. ft representing an increase of 27.9%.

***Confusing Stitch ...... as San Francisco-based Levi Strauss & Co. has filed a civil lawsuit against sportswear maker Polo Ralph Lauren Corp. for allegedly copying the denim manufacturer's trademarked back-pocket stitching design. The lawsuit claims that New York City-based PRL "has in the past and continues to manufacture, source, market and/or sell clothing that displays stitching designs that are confusingly similar to Levi Strauss & Co.'s arcuate trademark." Levi's back-pocket double-arc stitching, known as an "arcuate" design & legally protected since 1873, is the oldest know apparel trademark in the U.S.

***Phoenix International Founder Steps Down ...... as the company announced the retirement of CEO Bill McInerney, effective July 1st, 2007. After a remarkable 27-year career as CEO of Phoenix International Freight Services, Ltd., McInerney will now serve his company as Chairman of the Board of Directors. Upon retiring, McInerney proudly announced the appointment of Stephane Rambaud as Phoenix's new CEO & President. Rambaud, who began his career with Phoenix as a clerk in the Chicago import department, has served as President & COO since 2003. Phoenix International Freight Services, Ltd. is one of the fastest-growing public & private companies in the Chicago area based on 5-year revenue growth, according to Crain's Chicago Business - the nation's preeminent regional business newspaper. Phoenix, a privately held, full-service Int'l freight forwarder, NVOCC and Customs broker, has generated more than a 140% increase in revenue growth over the last 5 years and shows no signs of slowing down. Founded in 1979 by CEO Bill McInerney, Phoenix now has 71 global offices, more than 1500 employees and annual sales exceeding US$611M. Originally an air export company in Chicago, Phoenix began strategically opening offices in Asia in 1995. Cargo movement from the Pacific Rim now accounts for the majority of the company's revenue. Phoenix's expansion last year established 16 offices in India & Sri Lanka. Great job, Bill!

***Running On Fries .... as McDonald's plans to convert all of its delivery vehicles in the United Kingdom to run on biodiesel, using spent cooking oil. The restaurant company pledged to convert all 155 vehicles by next year, starting with 45 trucks based at its distribution center in Hampshire, England. The move follows a successful trial last year. In using the fuel, made by combining cooking oil & rapeseed oil, McDonald's said it would reduce consumption about 2,000 tons of carbon per year.

***McMarketing .... as a Chinese lawyer has sued McDonald's in China for using mostly English, not Chinese, on its receipts, violating his right to information. The lawyer, identified only as Shan, decided to take legal action against the world's largest restaurant chain after he ate at 2 McDonald's restaurants in Beijing in May & June. "McDonald's offers food service in China, but it does not use Chinese, which violates the consumers' right to know," the Beijing Youth Daily quoted Shan as saying. Shan has asked McDonald's to apologize in newspapers & give him symbolic compensation of 1 yuan (6 pence), the newspaper said. The case began on July 24. The newspaper quoted McDonald's as saying it was not fair to accuse the company of not using Chinese as its advertisements & menus were all in Chinese. Cases of East-meets-West culture clashes have been widely reported in China since the country embraced economic reforms in the late 1970s Earlier this month, a controversial Starbucks coffee shop in the Forbidden City, the former Imperial Palace at the heart of Beijing, closed its doors after facing years of opposition.


  2. The Cargo Letter Financial Page ___

**American Commercial Lines Inc. DOWN as 2nd quarter net income fell sharply to US$5.9M from US$17.7M in the year-earlier period.

** Burlington Northern Santa Fe Corp. DOWN as 2nd quarter net profit fell 8% to US$433M from the same period the prior year.

**Canadian National Railway Co. DOWN with a 29% drop in 2nd quarter net income to US$487M.

**Canadian Pacific Railroad. DOWN as net income dropped 32% in the 2nd quarter to US$232M.

**C.H. Robinson. UP with a 35% rise in net income during the 2nd quarter to US$82.3M, compared to US$66.6M in the same quarter a year ago.

**Continental Airlines. UP net income of US$228M in the 2nd quarter, up 15.2 % compared to US$198M in the same quarter last year.

**Con-way. DOWN as net income was off 35% to US$47.7M in Q2 compared to $74.1 million in the same period in 2006.

**Forward Air Corp. DOWN as 2nd-quarter profit dropped to US$11.5M or 38 cents a share, from US$13M or 41 cents a year ago.

**Horizon Lines. UP with 2nd quarter net income of US$9.6M, a 50% rise compared to US$6.4M in the same 2006 quarter.

** Hub Group Inc. UP with net profit for the 2nd quarter ended June 30 of US$13.8M, a 10% increase over same period the prior year.

**"K" Line. UP as net income of Yen25.8 billion (US$209.3M), up 165.9% compared with the prior year period.

**Kuehne + Nagel. UP as 1st half net earnings increased 28% to US$219M.

**Matson Navigation. UP as 2nd quarter operating profit increased 60% to US$39.1M, up from US$24.4M last year.

**MOL. UP as net income (container shipping, bulk shipping & other group activities) for the 1st quarter was Yen34 billion (US$285M), up from Yen23 billion a year ago.

**Norfolk Southern. UP with 2nd quarter net income of US$394M, up 5 % compared to US$375M in the same period last year.

**NYK. UP as net income for 2nd quarter soared 131.9% to Yen28.6 billion (US$232.4M), from Yen12.4 billion a year ago.

**Overseas Shipholding Group. UP with reported net income of US$79M, up from US$60M in the year-earlier period.

**Old Dominion Freight Line. UP as 2nd-quarter profit rose 4% to US$22.5M or 60 cents a share, from US$21.6M or 58 cents last year.

**UAL Corp., [parent of United Airlines]. UP with 2nd quarter net profit of US$274M, a 130% increase over US$119M posted in 2nd quarter of 2006.

**Union Pacific Corp. UP 14% with 2nd quarter net income of US$446.

**UPS. UP as 2nd quarter operating profit increased US$70M to US$1.77Bn as revenue swung up 3.9% to US$12.19Bn.

**US Airways. DOWN as net profit for 2nd quarter was US$263M, or US$2.77 per diluted share, compared to US$305M, or US$3.25 per diluted share for same period last year.

**U.S. Xpress Enterprises. DOWN as 2nd-quarter profit fell to US$2.7M or 18 cents a share, from US$5.7M or 37 cents a year ago.

**YRC Worldwide.. DOWN for the LTL carrier as 2nd-quarter net income dropped 40% to US$55.4M, compared to US$92.3M in the same period last year.



OUR "B" Section: FF World Air News***

3. Freight Forwarder World Air Briefs ___  

***Rush For The Rights ..... as 6new China routes will be awarded by the U.S. Dept. of Transportation (DOT) to become operational between 2007 & 2009. Long term, the agreement between China and the U.S. will more than double commercial passenger flights by 2010 & create unlimited cargo flights between the 2 countries. DOT Secretary Mary E. Peters estimates that the new pact signed on July 9, will create US$5Bn in passenger & cargo revenues for the airline industry over the next 6 years. Those applying for the new routes include Continental Airlines that wants to begin operation of a daily flight from Newark to Shanghai that would originate in Cleveland. Delta Airlines had previously filed to begin service between Atlanta & Shanghai. It has expanded that application to cover a daily flight to Beijing. American Airlines is asking for authority to fly from Chicago O'Hare to Beijing beginning on March 25, 2009. United Airlines is proposing flights between San Francisco & Guangzhou beginning in 2008 and betwen Los Angeles & Shanghai to start in 2009. US Airways had previously applied to operate service from Philadelphia to Shanghai to begin in 2008. Also filing for 2 daily flights is Northwest Airlines that would operate the nonstops from Detroit to Shanghai & Detroit to Beijing. 

***Virgin America Gets Its Wings .... as Sir Richard Branson was conspicuously absent during the launch last week. The U.S. startup airline was allowed to proceed after an open skies agreement reached between the U.S. & European Union was concluded in April. That agreement gave very little on the U.S. side relative to restrictions the government places on foreign airline involvement, control, or ownership of a U.S. airline. Branson's absence was clearly intended to reflect that attitude. Europeans, particularly the UK, expressed some concern when the deal was announced, saying they had gotten very little in exchange for opening EU markets to more U.S. flights. While U.S. carriers gained the right to fly between EU member states, EU carriers do not receive the reciprocal right to cabotage in the U.S. The Financial Times reported that EU approval of the agreement hinged on expectations of what would come in the next round of talks and the EU could be pressed to withdraw benefits granted to the U.S. if a protectionist attitude in the U.S. prevails. The line is bases at SFO and has a fleet of 12 Airbus aircraft. The story.

***UPS Airlines Adds Boeing 747-400 Freighters ...... as it took delivery of its 1st aircraft this month and said it will deploy the plane on long-range trunk routes between the U.S., Asia, Europe and the Middle East. UPS publicly unveiled the long-range aircraft at a ceremony on July 19. The company will use the jumbo freighters on trunk routes between the U.S., Asia, Europe & the Middle East. The 8th-largest airline in the world will begin by serving Hong Kong; Incheon, South Korea; Sydney, Australia; & Shanghai, where express delivery company UPS is building its China air hub. Eventually, UPS will use the plane on its "around the world" flights with stops in Cologne, Germany; Dubai; & Mumbai, India. UPS will receive 3 more new 747-400s from Boeing this year and 5 more in 2008. In addition, the company plans to acquire 5 more of the aircraft from other carriers by 2010, bringing the total fleet size to 13.

***Boeing Realizes The Dream .... as its first assembled 787 plane was unveiled at its plant in Everett, Wash., to a crowd of more than 15,000 people on Juky 8. The "Dreamliner" is the 1st new plane to be launched by Boeing since 1995 when it released the popular 777. The 787 promises to use 20% less fuel per passenger than similarly sized planes due to its near total construction with carbon-fiber composites. So far, Boeing has won 677 orders for the 787, with the most recent order announced on July 7. Air Berlin placed an order for 25 787 Dreamliners valued at US$4Bn, the single largest order so far placed by a European carrier. According to Reuters, the 1st assembled 787 will operate as 1 of 6 flight-test planes. Two other 787s will be used for "static & fatigue tests." The 1st plane for commercial use is scheduled for delivery to All Nippon Airways in May 2008. The Japanese carrier has placed an order for 50 Dreamliners

***Airbus Last-Ever A300 ...... as it has delivered its final freighter version of the aircraft, to FedEx. The A300 was first launched in 1969 and was the 1st widebody, twin-engine aircraft ever brought to market. A total of 821 A300/A310s have been ordered and there are more than 630 of the planes in service with about 80 operators. FedEx is the largest customer for these aircraft types with more than 120. Airbus anticipates a demand for more than 1,600 freighters in the mid-sized freighter category during the next 20 years, and to cater for that demand launched the new A330-200F freighter in Jan. So far the aircraft has a total of 67 orders and commitments from 7 customers.

***ShipRush for DHL .... as shippers using QuickBooks, eBay or Microsoft Outlook will now be able to ship directly to contacts within those applications without re-keying address data in a separate shipping system. ShipRush for DHL eliminates the need to copy and paste addresses or to export and import customer information in order to ship. Bravo Zulu!

***ABX Air Says No .... as the cargo airline has rejected an offer from Astar Air Cargo to buy the company. Miami-based Astar subsequently declined to increase its offer of US$7.75 per share and withdrew its interest in ABX Air. ABX, based in Wilmington, Ohio, said that while an Astar-ABX link up would have created operational benefits, none of the value from those streamlining efforts would accrue to ABX shareholders.

***Boeing's New Wing ..... as it has completed the 1st test flight of a futuristic aircraft that may well see its first use as a military cargo hauler by 2020. The blended-wing-body research aircraft, designated the X-48B, incorporates the wings into the planes body reminiscent of Jack Northrop's flying wings of the late 1940s & early 1950s. The new BWB design creates a much larger fuselage area, allowing for greater passengers or cargo capacity. Boeing's flight test of the new design used an unmanned model with a wingspan of about 20 feet and weighing nearly 450 pounds. The test flight, which lasted for 30 minutes & took the model to an altitude of nearly 7,500 feet, was conducted last week at NASA's Dryden Flight Research Center located at Edwards Air Force Base in California. Boeing officials said last month that with continued government funding, a BWB military cargo version could be flying sometime between 2015 & 2020.

***Next Time -- Reserve The Whole Row .... as a Qatar sheik held up a British Airways flight at Milan's Linate airport for nearly 3 hours after discovering 3 of his female relatives had been seated next to men they did not know. When none of the other business class passengers agreed to swap seats, the sheik, a member of Qatar's ruling family, went to the pilot, who had already started the engine, to complain, an airport official said. But the pilot ordered him & his traveling companions, the 3 women, 2 men, a cook & a servant, off the plane. The London-bound flight took off nearly 3 hours behind schedule on July 26 evening and around 50 of the 115 passengers missed connecting flights. Traditions in the conservative Gulf Arab region bar women from mixing with unrelated men. What, they never flew before?

***Wheels Up! .... as a pilot ran through the usual steps of getting ready to land his small plane, except for one little thing &emdash; he forgot to lower his landing gear. Without wheels, Thomas Lepsch's Beechcraft Bonanza skidded a few hundred feet down the runway at Middlesboro/Bell County Airport in Kentucky before coming to a stop July 15. "I'd never been at this airport before," Lepsch said. "There's a routine you go through as you prepare for a landing. I was distracted by another plane taking off & simply forgot to lower the landing gear. It was pilot error." Lepsch, 50, of Kingsport, Tenn., was not hurt, and he said there appeared to be little damage to his small plane, which he has owned since 1985. Lepsch had been flying over eastern Kentucky "to scout out some good fishing sites."

***Spuce Shottle Endeavor ..... as NASA moved space shuttle Endeavour a step closer to liftoff without an essential part: the "u." The spacecraft arrived at the its launch pad at the Kennedy Space Center on July 11, and officials welcomed it with a banner reading "Go Endeavor." The shuttle's name, however, is spelled the British way, with a "u." It's named after the first ship commanded by 18th century British explorer Capt. James Cook. The banner was up for about 90 minutes before being replaced by one with the correct spelling, but with photographers on hand for the arrival of the shuttle, cameras captured the mistake. Endeavour's launch is scheduled for Aug. 7.

***Bad Borsht Brawl Begins -- Becomes Benign -- But Boris & Buddies Belayed ..... as a Russian plane flying from St. Petersburg in Russia to Doloman in Turkey had to turn back mid-flight after a drunken brawl over a young woman spun out of control, police said in a statement on July 13. Three young Russians boarded the plane drunk on July 12 & continued their party on board. "One of them took a fancy to a girl but she did not want to socialize with the new admirer," police said. On rejection, the passenger slapped the woman on her face several times. Another passenger immediately rose to defend her. "A fight began, the situation started to get out of hand and the crew made the only right decision -- to turn back. The 3 drunk men were detained on landing at a St. Petersburg airport. They faced fines of "dozens of thousands of dollars," police said. The woman received medical treatment at the airport & the plane resumed its flight to Turkey. Phone numbers were not exchanged.



OUR "C" Section:  FF World Ocean News***

  4. FF World Ocean Briefs ____________    

***West Coast Port Strike Averted ..... as Union workers at the Southern California ports of Los Angeles & Long Beach reached a tentative agreement with shipping lines and terminal operators, averting the threat of a strike at the biggest U.S. port complex, the Los Angeles Times reported July 27. The office clerical unit of Local 63 of the Int'l Longshore & Warehouse Union reached agreement with management Thursday. The unit's 930 members will vote on the contract this week and are expected to ratify it overwhelmingly, the Times reported. A strike by Local 63 members alone would not have set large picket lines, but the 15,000-member ILWU had indicated its 7,000 members who work at the two ports would honor the clerks' picket lines, the paper said. Much U.S. truck & rail traffic comes from Asian freight that lands in the twin port complex. The deal would bring the office clerks salary up to US$80,000 per year with an additional US$40,000 in benefits. The employers contend that the OCU members are some of the highest paid office workers in the nation, and in addition to their pay receive a pension, health care benefits free of premiums, and 20 paid holidays a year. No, there are no job openings. These positions are largely inherited.

***Call For UN Security Council Action Against Somali Pirates .... as two United Nations agency chiefs have made a joint call for Int'l action to combat piracy & armed attacks against ships in waters off the coast of Somalia that is threatening the delivery of humanitarian assistance to the troubled East African country. So far this year there have been 15 attacks on vessels in or near Somali waters. Two of these attacks involved ships contracted by the UN World Food Program (WFP), and in one of those incidents a security guard was killed. The Int'l Maritime Organization Council has recently called again on UN Secretary General Ban Ki-Moon to bring the situation to the attention of the UN Security Council, so that, in turn, the Security Council requests the Transitional Federal Government of Somalia to take appropriate action. The IMO said that such action could include giving consent to ships -- as defined in Article 107 of the UN Convention on the Law of the Sea -- to enter the country's territorial waters when engaging in operations against pirates or suspected pirates & armed robbers endangering the safety of life at sea.

***Screened, Not Stirred .... as the Dept. of Homeland Security DHS) released the speech delivered by Secretary Michael Chertoff at the Center for Risk and Economic Analysis of Terrorism Events in Los Angeles. Among other things, he stated that the 3 basic principles of port security are partnership, risk management, and a layered approach to security. He pointed out that every shipment of cargo to the U.S. (100%) is currently screened. Those found to present a risk are then scanned. We support the spirit, but "screened" is not inspected. The public should understand the difference, although DHS has made great strides.

***But Those Machines Don't Work Anyway ..... as the U.S. Dept. of Homeland Security still plans to certify advanced radiation detection machines for use in the port environment to prevent weapons of mass destruction or radioactive-laced explosives from being smuggled into the country for a terrorist attack, Secretary Michael Chertoff said July 20. Chertoff was originally scheduled in June to sign off on the Advanced Spectroscopic Portal -- which is designed to sniff out the type of radiation being emitted from a container or trailer & help distinguish between benign & highly enriched uranium or plutonium -- after field testing 80 machines at the Port of New York & New Jersey. The Government Accountability Office has said the machines are at best accurate 50% of the time, far short of the 95% performance goal and a figure which would only partially reduce the number of nuisance alarms experiences by existing radiation portal monitors. The ports of Los Angeles & Long Beach average from 400 to 600 false alarms per day, according to DHS. On July 20, the Washington Post suggested that DHS had overhyped the capability of the advanced radiation detection machines when briefing Congress, & did not follow guidelines for doing a proper cost-benefit analysis of the system. The department has 1,000 1st-generation radiation portal monitors deployed at sea & land ports of entry & expects to be screening nearly 100% of inbound containers for radiation by the end of the year, if the machines work.

***Using Those Machines .... as Hong Kong & the U.S. have exchanged letters of understanding on cooperation in the U.S. Secure Freight Initiative, in which Hong Kong will participate in a limited capacity on a pilot basis. The initiative's aim is to use radiation detection, imaging, & related equipment to scan maritime cargo containers to help detect and prohibit illicit trafficking of special nuclear material and other radioactive material destined for the U.S. Containers leaving Hong Kong for the U.S. delivered through the in-gate of Modern Terminals in Kwai Chung will be scanned on a voluntary basis. U.S.-bound containers which have undergone the scanning process will be less likely to be subject to security inspection on their arrival at the U.S. ports. Ports in Pakistan, Honduras, the UK, Oman, Singapore, & Korea have also agreed to participate in the initiative.

***Canada Shipping Act 2001 .... as CSA 2001 came into effect on July 1, 2007, announced the Honorable Lawrence Cannon, Minister of Transport, Infrastructure & Communities. It replaces the Canada Shipping Act (CSA) as the principal legislation governing safety in marine transportation &recreational boating, as well as protection of the marine environment. The new Act promotes the sustainable growth of the shipping industry without compromising safety. It represents an updated & streamlined version of the original CSA, making it clearer & easier to understand. It promotes safety and provides better protection for the marine environment, through new and enhanced regulations; shifts from an inspection-based regime to a compliance-based regime, where vessel operators are encouraged to take a more active approach to safety; introduces a new method of enforcement with the introduction of administrative monetary penalties; replaces the Board of Steamship Inspection with the new Marine Technical Review Board; & establishes a new set of voyage classifications for the safer operation of vessels. It took 6 years for approval of the law.

***Gentlemen, Restart Your Trucks & Lives .... as the ports of Los Angeles & Long Beach have delayed adopting their controversial truck concession program that would bar owner-operators from doing business at the nation's busiest ports, after widespread objections by trucking, intermodal & shipping firms. Port commissioners originally were scheduled to vote on the plan in July but said June 27 they will push that back to Sept. to evaluate public comments and do an economic impact study.

***New Preference Port Takes Advantage ..... as China has opened a harbor area with preferential tax rates in the NE city of Dalian, a step towards developing a free trade zone between China, Japan & South Korea. The Dayaowan Bonded Harbor Area, located at the Dagushan Peninsula in the northeastern part of Dalian, enjoys preferential taxation & foreign exchange policies. This area is reported to be the 2nd largest of its kind in China, behind the Yangshan Bonded Harbor Area in Shanghai which is the largest. Since Aug., 2006 some US$25M has been spent in the construction of the 1st phase. Dalian is the 7th largest port in China. In 2006, it handled a total of 200 million tons of cargo & 30 million containers. Dongjiang Bonded Harbor Area, is located in the Tianjin Municipality.

***Every Advantage Taken ..... as the Chinese government is trying to lure Chinese-owned, foreign-flagged vessels to register in Shanghai, Tianjin & Dalian by promising tax breaks, the China Daily recently reported. The government has exempted Chinese-owned ships flagged in other nations before the end of 2005 from customs duty & VAT. A Ministry of Communications official said registering more ships in China would enhance the nation's maritime sector & provide for better protection of national interests. Imported vessels are levied a 27.53% tariff & import VAT, the report said, and so many ship operators chose to register their vessels overseas to cut costs & have an edge in the fiercely competitive market.

***Port of Jacksonville Steps Ahead ..... as construction on the new US$220M TraPac Container Terminal at Dames Point began this month when a crew drove in the very 1st piling at what will be the ships' berth. Operations at the 130-acre facility are scheduled to begin in late 2008 when Japanese shipping line Mitsui O.S.K. Lines will use the Florida terminal to move goods to and from Asia.

***Bulking Up ..... as the U.K.-based marine services provider Inchcape Shipping Services (ISS) has completed a 100% buyout of Australian agency house, Oceania Maritime Services (OMS) from P&O Maritime Services that it said would help double its business across Australasia. Financial details were not disclosed. OMS was formed in 2005 from the merger of Adsteam Agency's bulk ship agency business in Australia & Beaufort Shipping Agency Co., P&O's shipping agency unit in Australia. The company specializes in port agency services for bulk carriers & cruise ships plus husbandry services for container vessels.

***Interpool Acquired ..... as Fortress Investment Group has agreed the purchase of Princeton, N.J.-based Interpool, the big chassis & container lessor for US$797M. Including assumed debt that deal is worth US$2.4Bn. Interpool is the largest lessor of intermodal chassis in North America with a fleet 238,000 chassis at the beginning of the year. Its biggest competitor is Flexi-Van of Kenilworth, N.J., which said it has a fleet of more than 165,000 chassis. Interpool also owns and manages a container fleet of 756,000 TEUs, among the largest in the world. Last Sept. Fortress also purchased Carlisle Leasing Int'l, which has a 125,000-TEU fleet of refrigerated containers, and has said it planned to expand into dry cargo. It reportedly may be interested in buying even more container assets. Interpool is corporate sponsor of The Cargo Letter archives.

***A Call For Giants ..... as German shipowner & investment company Nordcapital has ordered eight 13,100-TEU containerships from Hyundai Heavy Industries in a deal worth US$1.4Bn, the largest single order the Korean shipyard has ever received for commercial ships. The vessels, to be delivered from April 2010 to March 2011, will also be the biggest container vessels HHI has ever built. The ships will be designed with what Nordcapital described as an "environmental passport," an economic main engine fitted for low-sulphur fuels, TBT-free paint coatings & inboard fuel tanks.

***For Those To Follow .... as Tokyo-based MOL has launched its first training vessel, M/V Spirit of MOL, as part of the Japanese company's efforts to improve the safety of vessel operations. The 4,878-ton, 348 ft. vessel has a training bridge on a floor above the actual bridge. MOL also has about 10 full-time instructors, who will provide education and practical training to 180 trainees from different nations per session.

***Why Countryman & McDaniel Is In Business .... as a 200-ton ship engine being transported to a San Diego Navy shipyard fell off a trailer July 26, destroying several parked cars, damaging a water main, & prompting the facility to temporarily cease operations. The engine, being transported on a tractor-trailer to the General Dynamics NASSCO shipbuilding yard, slid off the trailer. The engine fell with enough force to break the road surface and create a crater, landed atop one car and hit 2 others. It also broke a 16-inch cast iron water main, causing the NASSCO yard to cancel the 1st shift of the day affecting about 3,000 of the yard's 6,000 employees. How was your day?

***Suez Canal Volume Up ... with a 12.8% year-on-year rise in monthly revenue in June to US$358.8M, up from US$318.1M in same month last year. During the month 1,657 vessels transited Egypt's Int'l corridor, up from 1,534 a year ago.

***Throughput >>> Port of Antwerp cargo increased 6.7% during the 1st half of 2007, to 89 million tons and during the 6-month period, the Belgian port handled 46.6 million tons of container cargo, a 15.2% increase as box traffic increased 14.6% to 4.02 million TEUs. >>> Port of Dunkirk in France handled 28.4 million tons of cargo in the 1st half of 2007, a 1% improvement from 1st quarter of 2006. >>> Port of Naples handled 10.55 million tons of cargo in 1st half of 2007, an increase of 5.7% over the 1st 6 months of 2006, when the Italian port handled 9.98 million tons as the Mediterranean port experienced 17% growth in terms of containers from 208,000 TEUs in the 1st 6 months of 2006 to 244,000 TEUs in the same period of 2007. >>> Port of Le Havre on the French Atlantic coast handled 39.1 million tons in the 1st half of 2007, a 6.9% increase over the 1st 6 months of 2006 & container traffic at the port surged 26.3% year-on-year to 1.26 million TEUs after 6 months. >>> The Port of Rotterdam, Europe's largest container complex, increased its container throughput 13% in the 1st half of 2007 to 5.3 million TEUs. >>> The Far Eastern Freight Conference reported that its members' westbound Asia/Europe volume increased 21.2% in the 2nd quarter to reach 2.4 million TEUs -- while eastbound figures up to the end of May, showed a growth of 8.6% to 1.36 million TEUs. >>> For 1st half, APL's volume is up 11% to 1.12 million FEUs with the average revenue per FEU down 2% to US$2,592.

***This Month In U.S. Navy History .........

1776 - American colonies declare their independence from Great Britain.

1777 - John Paul Jones hoists 1st Stars and Stripes flag on USS Ranger at Portsmouth, N.H.

1801 - First Presidential Review of U.S. Marine Band & Marines at the White House.

1831 - U.S. concludes indemnity treaty with France.

1842 - First test of electrically operated underwater torpedo sinks gunboat Boxer.

1863 - Confederates surrender of Vicksburg, Miss., gives Union control of Mississippi River. 

1898 - At Battle of Santiago, Cuba, Rear Adm. Sampson's squadron destroys Spanish fleet.

1915 - Sailors & Marines land in Haiti to restore order.

1943 - Launching of USS Harmon (DE 72), 1st ship named for an African-American.

1945 - USS Callaghan (DD 792) is last ship sunk by a Japanese kamikaze attack, off Okinawa. 

1954 - Aircraft from USS Philippine Sea (CVA 47) shoot down 2 Chinese fighters that fired on them while they were providing air cover for rescue operations for a U.K. airliner shot down by a Chinese aircraft. 

***The Spice of Life ..... as a cat that spent nearly 3 weeks crossing the Pacific inside a shipping container with no food or water appears to be just fine. Pamela Escamilla lost sight of her 3-year-old calico, Spice, while packing a large container with household goods in Waikoloa Village, Hawaii. The container was shipped June 15 to Southern California. Escamilla, 39, & her husband could not find the cat before taking their flight and asked neighbors in Hawaii to call if Spice returned. As it turns out, Spice spent 18 days in the pitch-black container without food or water before arriving at the San Bernardino home of Escamilla's parents on July 3. When Escamilla opened the container, she & family members noticed fluffs of cat hair on the floor. They started removing items, & Escamilla climbed into the container to search. She said she saw Spice poke her head out from behind some bicycles. Escamilla gently picked up the cat & took her to a veterinarian who said the feline's prognosis was good. Spice's kidneys had shrunk & her bowels were backed up, but she managed to get some food & water down at the vet, Escamilla said. Escamilla said the veterinarian told her that calicos have a strong survival instinct. Wow!



   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 feature for July 2007 "Stack Attack!" - M/V Ital Florida

See our "new" feature for July 2007: "M/V MSC Napoli." Our 7 month photo study continues with a desperate effort -- then triumph -- & then the sad death of a new vessel & two points of view. Good-bye M/V MSC Napoli, but we have much more to post.

You Tube feature: "Container Gantry Gone"

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..............

Cargo & Trade>>>>>>

Current Issues in Economics & Finance ....... a weaker dollar unlikely to alter consumption patterns sufficiently to eliminate gap between U.S. exports & imports.

Economic & Market Research Reports For Latin America

Euro Pages ........ EU business directory

Israel Ministry of Industry, Trade & Labor

Israel Trade Leads

Latin America Trade Coalition letter on the U.S.-Peru Trade Promotion Agreement (TPA) & the U.S.-Colombia & U.S.-Panama TPAs

Maritime Security Awareness Course

Rethinking The Approach to U.S.- Mexico Border Logistics Management

StateMaster ......... unique statistical database which allows you to research & compare a multitude of different data on U.S. states.

The Visible Supply Chain ....... white paper

UK Dept. for Transport's Ports Policy Review

U.S. Andean Trade Preference Act (ATPA) / Andean Trade Promotion & Drug Eradication Act (ATPDEA) ....... extended to Feb., 2008. (TBT-07-011 & TBT-07-007)

U.S. Customs & Border Protection Rules of Origin

U.S. Customs & Border Protection (Customs, CBP) Valuation Encyclopedia

U.S. Dept. of Agriculture Proposed Rule for Revising Fruits & Vegetables Regulations&emdash;Streamlining The Import Approval Process

U.S. Dept. of Commerce New Antiboycott Penalty Guidelines

U.S. Navy Fleet Numerical & Oceanography Center ......... Meteorology, Oceanography, Climatology

U.S. Navy Safety Videos

U.S. Navy Wave Watch

Who's Who in Airfreight Forwarding



BRS Whole Aircraft Parachute System -- And See

Omron Releases 50% Smaller RFID Card

Real-Time Railcar GPS Location

Trackstick II Personal Tracker ......... records location, time, date, speed, heading & altitude at preset intervals for US$179.

Transfer Cars For Pallet Handling



Transport Events

Trade Shows, Exhibitions, Conferences & Business Events Worldwide

World Trade Organization Events


2nd Air Cargo India Conf. & Exhibit ....... 23-25 Jan. 2008, World Trade Center, Mumbai

2nd Annual Canada-Asia Maritime Conference .......Sept. 10 & 11, 2007, Westin Bayshore, Vancouver, BC, Canada

3rd China Int'l Container & Inter Modal Transportation Development Forum ..... Sept. 6-7, 2006, Beijing, PR China

AAPA Annual Convention ....... Sept. 30-Oct. 4, Port of Virginia

Multimodal 2008 ........ 22 to 24 April 2008, Birmingham, UK

National Maritime Salvage Conference & Expo 2007 ........Oct. 9-11, 2007 Hyatt Regency Crystal City, Arlington, Va


Air Cargo India 2008 international .... 23-25 Jan. 2008, World Trade Center, Mumbai

American Assn. of Port Authorities (AAPA) Convention ....... Sept. 30 - Oct. 4, 2007, Norfolk Marriott, Norfolk, VA

The East Coast Maritime Conference ....... Sept. 24 & 25, 2007, Hilton Virginia Beach Oceanfront, Virginia Beach, VA

Europort Maritime 2007 ........6-9 Nov. 2007, Rotterdam Netherlands

Intermodal 2007 ....... 4-6 Dec. 2007, Amsterdam RAI, Amsterdam Netherlands

The Longshore Institute Seminars ........ Aug. 14-16, 2007, Renaissance Seattle Hotel, Seattle, WA

Multimodal 2008 ........ 22 to 24 April 2008, Birmingham, UK

National Maritime Salvage Conference & Expo 2007 ........Oct. 9-11, 2007 Hyatt Regency Crystal City, Arlington, Va

OceanTech Expo 07 ...... Sept. 5-7, Providence, Rhode Island



Executive Education's Role In Your Supply Chain Future

Helium Report Decision Guide



General Interest>>>>>>>>>

411 On U.S. Gangs

Barn For Sale ....... a retired New York man recently purchased an abandoned barn in Portugal, but needed to cut welds before forcing the doors open. Geez!

Bellingham Bay Community Boating Center Opened July 6th!

Caribbean Hurricane Network

Cessna SkyCatcher

"Don't Panic, or You Will Die"

EquMath ..... math made easy for the kids & us

Fantasy U.S. Congress - Where People Play Politics!

Friday the 13th, Jason Takes NASA

Robot Dance

Silent Star Wars

Soda Pop Shop

Star Wars Help Desk

The Way Things Go



OUR "E" Section:  The Forwarder/Broker World***

  7. New U.S. Transport Related Legal Cases _______   

Calix-Chacon v. Global International Marine, Inc.

5th U.S. Circuit Court of Appeals.,

July 19, 2007, No. 06-30686

Application of forum selection clause to maintenance & cure claim: The court remanded an appeal in a claim for maintenance and cure because the court determined that the trial court had utilized the wrong standard in its consideration of the validity of the forum selection clause found in the mariner's employment contract. The trial court had concluded that both the general maritime law and the Shipowner's Liability (Sick and Injured Seamen) Convention of 1936 express a strong public policy preventing the contractual abridgment of maintenance and cure liability. The appellate court ruled that in maritime actions forum selection clauses are to be enforced unless the clause is fundamentally unfair and therefore unreasonable. Read Decision.


Trafigura Beheer B.V. v. M/T Probo Elk

5th U.S. Circuit Court of Appeals.

July 16, 2007, No. 06-20576

Forum selection clause in charter trumps LOU : In an unpublished decision, the U.S. Court of Appeals for the 5th Circuit ruled that the forum selection clause in a charter prevails over a letter of undertaking (LOU), particularly where the LOU expressly reserved all defenses. In the instant case, the charter related to the shipment of naphtha from Algeria to the Netherlands. The charter provided that the High Court of London would have exclusive jurisdiction over all disputes arising out of the charter. The cargo was rejected by the purchaser in the Netherlands for contamination. The charterer had the ship diverted to Texas. Upon arrival in Texas, the charterer alleged that the contamination was caused by the ship. It threatened to have the ship arrested unless the owners entered into a LOU agreeing to appear in federal court in Texas. The owners appeared in court and asserted improper venue as a defense. The charterer asserted that the jurisdiction provision of the LOU superseded the forum selection clause in the charter. The court held that mere appearance in court by the defendant does not waive venue. Read Decision.


Otal Investments Ltd. v. M.V. Clary

2nd Circuit Court of Appeals

July 6, 2007, No. 06-0591

All 3 ships at fault in collision of M/V Tricolor : The appeals court reversed the trial court's finding that one ship was solely at fault in the collision & remanded the case to the trial court to apportion the fault, directing the trial court "to consider the relative culpability of each vessel and the relative extent to which the culpability of each caused the collision." The District Court had found a single vessel, M/V Kariba, to be exclusively at fault for the accident, which resulted in the loss of the US$40M ship, & its cargo of luxury cars worth another US$49M. The collision occurred on Dec. 14, 2002, before dawn in heavy fog. M/V Kariba & M/V Tricolor were traveling roughly west, with the M/V Tricolor overtaking the M/V Kariba on its starboard side. The M/V Clary was proceeding north on a collision course with M/V Kariba. When the M/V Kariba turned to avoid collision with M/V Clary, she struck M/V Tricolor. There was no loss of life, but the M/V Tricolor sank quickly & was a total loss. Positioned in one of the busiest waterways in the world, M/V Tricolor wreck was hit in the following days by 2 other ships, M/V Nicola & M/V Vicky. M/V Tricolor was eventually cut up into pieces & removed. On appeal, the court held that all 3 ships had been negligent to some extent. The 2nd Circuit upheld the trial court's determination that the Pennsylvania Rule, which places a heavy burden on any vessel that violates a statute, would not apply if the 1910 Collision Convention applies. Read Decision. Another View


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

Maria Payne (Countryman & McDaniel)


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